10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission File Number 001-39135

SiTime Corporation

(Exact name of Registrant as specified in its Charter)

Delaware	02-0713868
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5451 Patrick Henry Drive Santa Clara, CA	95054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 328-4400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	SITM	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant based on the last reported sale of the common stock on June 30, 2021, on the Nasdaq Global Market, was $1,592,780,318 based on the closing price of the registrant’s common stock on such date of $126.59 per share.

The number of shares of Registrant’s Common Stock outstanding as of February 17, 2022 was 20,824,740.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information from the registrant’s definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed no later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2021.

Table of Contents

		Page
PART I
Item 1.	Business	6
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	38
Item 2.	Properties	38
Item 3.	Legal Proceedings	38
Item 4.	Mine Safety Disclosures	38
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	39
Item 6.	[Reserved]	41
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	51
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	77
Item 9A.	Controls and Procedures	77
Item 9B.	Other Information	79
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	79
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	80
Item 11.	Executive Compensation	80
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	80
Item 13.	Certain Relationships and Related Transactions, and Director Independence	81
Item 14.	Principal Accounting Fees and Services	81
PART IV
Item 15.	Exhibits and Financial Statement Schedules	82
Item 16.	Form 10-K Summary	86

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes

2

to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements in this report include, but are not limited to, statements about:

•our plans to focus on oscillators, clock ICs, resonators and timing synchronization solutions and to aggressively expand our presence in these markets;

•the impact of the COVID-19 pandemic will have on our business, employees, revenue and other operating results, liquidity, and cash flows, and its impact on the businesses of our suppliers and customers, and our anticipated responses thereto;

•our expectations regarding our ability to address market and customer demands and to timely develop new or enhanced solutions to meet those demands;

•anticipated trends, challenges and growth in our business and the markets in which we operate, including pricing expectations;

•our expectations regarding our revenue, gross margin, and expenses;

•our belief as to the sufficiency of our existing cash and cash equivalents and funds available for borrowing under our credit facilities to meet our cash needs for at least the next 12 months and our future capital requirements over the longer term, including the potential impact of the COVID-19 pandemic thereon;

•our expectations regarding dependence on our largest customer;

•our customer relationships and our ability to retain and expand our customer relationships and to achieve design wins;

•our expectations regarding the success, cost, and timing of new products;

•the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets;

•our plans to expand sales and marketing efforts through increased collaboration with our distributors, resellers, and contracted sales representatives, and our plans to introduce a self-service web portal as well as digital marketing campaigns for branding and lead generation;

•our goal to become the leading timing solution provider for advanced and challenging applications;

•our positioning of being designed into current systems as well as future products;

•our belief that our advanced packaging designs can enable the smallest footprints in the industry;

•our expectations regarding competition in our existing and future markets;

•our expectations regarding regulatory developments in the United States and foreign countries;

•our expectations regarding the performance of, and our relationships with, our third-party suppliers and manufacturers;

•our expectations regarding our and our customers’ ability to respond successfully to technological or industry developments;

•our expectations regarding our ability to attract and retain key personnel;

•our expectations regarding intellectual property and related litigation;

•the adequacy and availability of our leased facilities;

•the accuracy of our estimates regarding capital requirements, expectations regarding renewal of loans, and needs for additional financing.

These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this report and are subject to risks and uncertainties. We discuss many of these risks in greater detail in the “Risk Factor Summary” below and under Item 1. “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We qualify all of the forward-looking statements in this report by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity,

3

performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Risk Factors Summary

Our business is subject to numerous risks, as more fully described in “Risk Factors” below. You should read these risks before you invest in our common stock. We may be unable, for many reasons, including those that are beyond our control, to implement or execute our business strategy. In particular, risks associated with our business include, among others:

•The impact and uncertainty related to the ongoing COVID-19 pandemic could adversely impact our business, results of operations and financial condition, as well as the businesses of our suppliers and customers;

•A downturn in the worldwide economy may harm our business;

•The third parties we rely upon for our raw materials, engineered materials, wafer fabrication and supply, assembly, packaging and testing may be unable to secure raw materials, reduce their resources available to us and our immediate suppliers, not meet satisfactory yields or quality, or increase pricing, which could harm our ability to ship our solutions to our customers on time and in the quantity required which could cause an unanticipated decline in our sales and loss of customers;

•A portion of our operations is located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability;

•We currently depend on one end customer for a large portion of our revenue; the loss of, or a significant reduction in orders from our customers, including this end customer, could significantly reduce our revenue and adversely impact our operating results;

•If we are unable to expand or further diversify our customer base, our business, financial condition, and results of operations could suffer;

•We generally do not have long-term purchase commitments with our customers, and orders may be cancelled, reduced, or rescheduled with little or no notice, which in turn exposes us to inventory risk and may harm our operating results;

•Our revenue and operating results may fluctuate from period to period due to, among other factors, the impact of the COVID-19 pandemic on our business as well as our suppliers and customers, customer demand, product life cycles, fluctuations in inventories held by our distributors or end customers, the gain or loss of significant customers, the availability of capacity in our supply chain, research and development costs, and product warranty claims. This in turn could cause our stock price to decline;

•Our success and future revenue depend on our ability to achieve design wins and to convince our current and prospective customers to design our products into their product offerings, as well as our customers’ ability to develop products that achieve market acceptance;

•Our target customer and product markets may not grow or develop as we currently expect, and if we fail to penetrate new markets and scale successfully within those markets, our revenue and financial condition would be harmed;

•If we are not able to successfully introduce and ship in volume new products in a timely manner, our business and revenue will suffer;

•Our gross margins may fluctuate due to a variety of factors, which could negatively impact our results of operations and our financial condition;

•Our revenue in recent periods may not be indicative of future performance and our revenue may fluctuate over time;

4

•Our customers require our products and our third-party contractors to undergo a lengthy and expensive qualification process, which does not assure product sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, our business and operating results would suffer;

•We provide a lifetime warranty on our products and may be subject to warranty or product liability claims, which could harm our reputation, result in unexpected expenses, and cause us to lose market share;

•Defects in our products could harm our relationships with our customers and damage our reputation;

•We are subject to the cyclical nature of the semiconductor industry;

•If we fail to compete effectively, we may lose or fail to gain market share, which could negatively impact our operating results and our business;

•We may not be able to accurately predict our future capital needs, and we may not be able to obtain additional financing to fund our operations;

•We may seek, or be required to seek debt financing in the immediate or near term;

•If significant tariffs or other trade restrictions are placed on our products or third-party suppliers, our revenue and results of operations may be materially harmed;

•Failure to comply with the laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences;

•We are subject to government regulation, including import, export and economic sanctions laws and regulations that may expose us to liability and increase our costs;

•New or future changes to U.S. and non-U.S. tax laws, or tax regulatory authorities disagreeing with our positions and conclusions regarding certain tax positions, could materially adversely affect us;

•Breaches or other disruptions of our security systems may damage our reputation and adversely affect our business;

•We may fail to adequately protect our intellectual property and have received, and may in the future receive, claims of intellectual property infringement, misappropriation, or other claims, which in turn could result in significant expense, result in the loss of significant rights, and harm our relationship with our end customers and distributors;

•We may be impacted by risks associated with MegaChips’ ownership of a significant portion of our stock, for instance as long as MegaChips holds a significant amount of our stock, our other shareholders’ ability to influence matters requiring stockholder approval will be limited, and there could be potential conflicts of interest between us and affiliates of MegaChips, which could impact our business and operating results;

•Substantial future sales of our common stock could cause the market price of our common stock to decline; and

•Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

5

PART I

Item 1. Business

Overview

We are a leading provider of silicon timing solutions. Our timing solutions are the heartbeat of our customers’ electronic systems. They solve complex timing problems and enable industry-leading products. We provide solutions that are differentiated by high performance and reliability, programmability, small size, and low power consumption. Our products have been designed into over 250 applications across our target markets, including communications and enterprise, automotive, industrial, aerospace, mobile, Internet of Thing (“IoT”), and consumer. Our current solutions include various types of oscillators, as well as resonators and clock integrated circuits (“ICs”). Our all-silicon solutions are based on three fundamental areas of expertise: micro-electro-mechanical systems (“MEMS”), analog mixed-signal design capabilities, and advanced system-level integration expertise. This expertise allows us to design MEMS resonators, analog circuits, as well as systems and packaging, and put these all together to deliver a system level solution that solves customers’ complex timing problems. In this aspect, we are different than quartz-based providers, who typically have expertise in designing and manufacturing resonators, but usually outsource the analog and packaging. We are also different in that our MEMS resonators are made with silicon, while the quartz suppliers use quartz crystal technology. Our timing solutions are designed to be resilient to environmental stresses. For the communications and enterprise market, our timing solutions provide high performance and resilience in dense, less-controlled environments that experience harsh conditions–an advantage as equipment moves closer to the customer with the rollout of 5G. For the automotive market, our solutions can be utilized in automotive electronics, including advanced driver assistance systems (“ADAS”) for self-driving cars, which require increased timing accuracy. For the industrial market, our products offer programmability and high reliability for the diverse operating conditions of industrial equipment, including high temperatures, mechanical shock and vibration. For the aerospace market, our solutions provide lower acceleration sensitivity for end products that operate in rugged conditions. For the mobile, IoT and consumer market, our silicon-based timing solutions have the advantage of offering high performance at optimal power consumption and size, as our customers fit more functionality into smaller devices.

We commenced commercial shipments of our first oscillator products in 2006. Substantially all of our revenue to date has been derived from sales of oscillator systems across our target end markets. We recently introduced products into the clock IC market, which we began sampling in 2019, and intend to focus on clock IC and timing sync solutions in the future. We seek to aggressively expand our presence in these two markets.

We sell our products primarily through distributors and resellers, who in turn sell to our end customers. Based on sell-through information provided by these distributors, we believe the majority of our end customers are based in the U.S.

We operate a fabless business model, allowing us to focus on the design, sales, and marketing of our products, quickly scale production, and significantly reduce our capital expenditures. We leverage our global network of distributors and resellers to address the broad set of end markets we serve. For our largest accounts, dedicated sales personnel work with the end customer to ensure that our solutions fully address the end customer’s timing needs. Our smaller customers work directly with our distributors to select the optimum timing solution for their needs.

Industry Background

Timing Solutions Enable Innovation and are Rapidly Evolving

The ability to accurately measure and reference time has been essential to many of humankind’s greatest inventions and technological progress. Timing technology has continued to evolve over centuries, forming a critical aspect of broader technological advancement. Timing is the heartbeat of digital electronic systems, ensuring that the system runs smoothly and reliably by providing and distributing clock signals to various critical components such as CPUs, communication and interface chips, and radio frequency components. As electronics are expected to operate at higher performance levels in increasingly challenging environments, while also being more complex and footprint-constrained, we believe they will require more sophisticated timing solutions. For example, as 5G communications networks evolve, we expect that they will require higher precision from a greater number of oscillators and timing devices.

Key Building Blocks of Timing Solutions

Timing solutions comprise three key building blocks: resonators, oscillators, and clock ICs. While simpler systems generally require only an external resonator coupled with a basic embedded oscillator circuit, more complex systems require advanced timing

6

solutions that may integrate a variety of resonators, oscillators, and clock ICs in a single chip package. The complexity of these timing solutions increases significantly when the performance requirements of the systems that use them increase, such as electronic systems required to support the 5G communication network infrastructure.

The key building blocks of SiTime’s timing solutions are:

•Resonators – mechanical silicon structures that vibrate at a precise frequency and provide the core accuracy and stability in oscillator systems;

•Oscillators – active systems that combine resonators with analog mixed-signal ICs that cause the resonators to vibrate, generating accurate and stable clock signals; and

•Clock ICs – integrated analog mixed-signal circuits that use phase-locked loops (“PLLs”), clock dividers, and drivers, and have multiple clock signals on the output of the system. Clock ICs require resonators and oscillators for timing references and may integrate these components into complex systems.

These three building blocks may be used individually or in combination, depending on the end product’s performance, price, and size requirements.

Limitations of Legacy Quartz-based Solutions

For over 70 years, quartz crystal has been the predominant technology of choice for resonators and will continue to play a role in the timing market. In a quartz oscillator, a quartz crystal resonator is paired with a silicon-based clock IC in a ceramic package. However, quartz timing devices, largely unchanged in decades, have many inherent limitations, including limited frequency ranges, sensitivity to rapid temperature changes, vulnerability to vibration and mechanical shock, susceptibility to frequency jumps at particular temperatures, and limited programmability. Quartz devices must be housed in ceramic packaging, and thus are difficult to integrate into standard semiconductor packages. Quartz products require dedicated manufacturing facilities and have relatively long lead times due to the need to specify various characteristics well in advance of production, without the ability to reconfigure them during the design cycle. In addition, as electronic systems become more complex, feature-rich, and robust, they require more sophisticated timing systems that can seamlessly integrate a variety of resonators, oscillators, and clock ICs in various system-level combinations. This seamless integration is more difficult with legacy quartz systems.

Silicon Timing Solutions Poised to Disrupt the Market

In recent years, advances in silicon-based manufacturing and packaging techniques have allowed the development of alternatives to quartz crystal technology. We believe that silicon MEMS is an ideal technology for resonator design. Specifically, its ability to integrate with other circuits in standard semiconductor packages has made scalable standard silicon manufacturing possible for resonators and broader timing technology. MEMS and silicon-based technologies can operate in a wide range of frequencies, are more resistant to vibration, mechanical shock, and temperature changes, and are less susceptible to frequency jumps. These technologies are also inherently well-suited to produce timing solutions that are small, and offer high performance, robustness and programmability. Timing solutions based on these technologies are manufactured using semiconductor processes in fabrication plants with high capacity, allowing for cost-effective high-volume manufacturing.

Significant Market Opportunity for Timing Solutions

According to Dedalus Consulting - 2019 Frequency Control Components Global Markets, End-Users, Applications & Competitors: Analysis & Forecasts and our estimates, the global timing market is expected to grow to $10.1 billion by 2024. Dedalus Consulting estimates that oscillators and standalone resonators will represent approximately $5.0 billion and $4.0 billion total addressable markets, respectively, in 2024. Based on our internal estimates, we believe clock ICs represent an approximate $1.0 billion total addressable market. As a subset of the broader timing market, the market for MEMS timing devices is projected to grow from $0.24 billion in 2021 to $1 billion by 2024, representing a compound annual growth rate of 62%, according to internal company estimates.

7

The Opportunity for Advanced Solutions

From high-performance network infrastructure equipment to low-power battery-operated devices, precise timing solutions enable virtually all electronics. The complexity of such timing solutions increases significantly with the performance requirements of the systems in which they are used. Below are some examples of end markets in which we believe our silicon-based timing is enabling or has the potential to enable, greater functionality than legacy solutions:

Communications and Enterprise

Communications infrastructure equipment used in wireless base stations, wired infrastructure equipment, enterprise networks, and cloud data centers must provide high performance and stability in demanding environments, which may include temperature fluctuations, mechanical shocks, and vibration. If the timing solution within the equipment fails, networks can shut down, leading to service disruptions and higher operating costs. According to Gartner, “Recent reports on 5G pilots and testing have identified a wide range of projected data throughput speeds ranging from 10 times up to 1,000 times faster than 4G. Other reports estimate ranges of one to 10 gigabytes per second.”

Automotive, Industrial, and Aerospace

For automotive applications, timing technology must perform reliably over the life of an automobile in an environment characterized by vibration, mechanical shocks, electromagnetic interference, wide temperature ranges, and rapid temperature change. The AECC (Automotive Edge Computing Consortium) estimated in 2020 that “data traffic from connected vehicles will exceed 1,000 times the present volume, surpassing 10 exabytes per month by 2025.” These communication systems will require highly-reliable precise timing. We believe silicon-based timing can address many of the challenges associated with this demanding automotive ecosystem.

Industrial equipment, ranging from factory machinery to medical devices, is often exposed to environments characterized by temperature fluctuation, mechanical shocks, vibration, and electromagnetic interference. We believe silicon-based timing solutions can perform better than legacy quartz-based solutions in demanding industrial environments at comparable cost and with lower power consumption and higher reliability. In addition, with the highly diverse nature of industrial applications and the need for unique operating frequencies, we believe the programmable architecture of silicon timing products provides an advantage.

Timing devices used in aerospace and defense applications such as rockets and satellites need to withstand extreme vibration forces and temperature gradients during operation. Quartz-based solutions can be impacted by vibrating forces acting on the whole system. MEMS timing devices are well-suited for these applications, as they provide up to 50 times better acceleration sensitivity under vibration than comparable quartz-based solutions.

Mobile, IoT and Consumer

The growing reliance on mobile devices and the IoT revolution has enabled the proliferation of billions of internet-connected devices in industrial and consumer applications. These devices range from smartphones and personal wearable devices to electronics embedded in appliances and industrial machinery. Many of these devices need to package a significant amount of electronics in a limited battery-powered and size-constrained form factor, while still requiring high performance and high accuracy. Due to the ability to integrate with ICs, we believe silicon-based timing solutions are well-suited to optimize footprint, reliability, and power consumption of the overall system within mobile, IoT and consumer devices.

Our Solutions and Technology

Our silicon timing solutions comprise:

•MEMS resonators: We pioneered the silicon MEMS-based timing industry with the MEMS First®, EpiSeal®, and TempFlat® processes and technologies. These manufacturing processes have allowed the hermetically-sealed resonator die to be housed in industry-standard, low-cost plastic packages. These processes and technologies improve resonator stability, increase quality and reliability, and decrease aging effects. We believe our MEMS resonators are easy to integrate into silicon-based oscillators and clock ICs, and allow us to develop tightly-integrated high performance timing solutions.

•Oscillators and Clock ICs: We have a dedicated analog and mixed-signal engineering team focused on the most complex challenges related to oscillators and clock ICs. Our analog mixed-signal technologies include several innovative low-noise circuit-based oscillators, high-performance PLLs, low-noise data converters, and precision low-aging reference circuits.

8

Many of our oscillators use temperature sensing to maximize frequency stability. Our low-power nano-ampere and high-resolution DualMEMS® micro-kelvin-resolution sensing technologies stabilize our timing solutions despite rapid temperature changes. We also offer what we consider to be leading solutions across a range of attributes, including Allan deviation, power supply noise rejection, temperature-sensing resolution, and integrated phase jitter.

•Advanced system-level integration: We have extensive know-how in integrating various timing components into elegant system-level solutions. Our ability to integrate MEMS-based resonators with analog mixed-signal products allows us to develop oscillators and clock ICs in diverse permutations, which helps us solve difficult timing challenges. Using advanced packaging designs, we believe we can design our products to fit in the smallest footprints in the industry.

We design each key building block of the timing system, from MEMS resonators to oscillator circuits to clock ICs. Our ability to combine our MEMS resonators with analog-mixed signal components in a fabless semiconductor supply chain allows us to build full timing solutions from the ground up, enabling our customers to focus on their core expertise.

Our flexible and programmable timing solutions offer the following benefits:

•High performance: Our portfolio of silicon-based MEMS timing products allows us to provide our customers with high performance solutions across a wide range of attributes including stability over temperature, vibration, phase jitter, and other metrics.

•Small size: Our solutions have a small footprint and package size, optimizing the end customer’s board area. Additionally, many of our products have added integrated functions such as on-chip regulators and load capacitors which reduce the need for external components and decrease the overall system size.

•Low power: Our solutions operate at low power levels and have differentiated power-saving features such as NanoDrive™ and FlexSwing™, making them well-suited for mobile, IoT and other battery-operated applications.

•Programmability: Our devices are configurable across a wide range of parameters, including frequency, stability metrics, voltage parameters, and temperature ranges, among others, resulting in design flexibility for the customer, and enabling us to produce a vast number of custom timing products on demand with short lead times.

•High quality and reliability: The combination of our materials, design, and manufacturing processes enables us to produce high quality products with long-term reliability. Our solutions offer low sensitivity to electromagnetic energy, mechanical shock, vibration, airflow, temperature gradients and power supply noise.

•Flexible integration: Our MEMS resonators and clock ICs allow a wide range of packaging and integration methodologies to support various levels of size, cost, and electrical, thermal, and mechanical performance.

•Leveraged product development: Our solutions employ different combinations of MEMS and circuit components, enabling us to generate a vast number of custom part numbers, including over 40,000 unique part numbers shipped as of December 31, 2021.

•Rapid time to market: Our solutions can typically be delivered within weeks of initial customer order and configuration, enabling us to reduce our end customers’ time to market.

Our Strategy

Our objective is to be the leading timing solution provider for advanced and challenging applications. Our solutions not only displace existing products by providing improved performance across a range of operational attributes, but also enable next-generation devices by providing high performance at affordable price points. Key elements of our strategy include:

•Extend our silicon-based timing leadership. We intend to continue driving innovation in the timing market and working with our ecosystem partners to help set the timing standards of the future. We plan to improve the performance of our current solution suite across a variety of key metrics, including size, power, frequency stability, phase noise, and signal quality, while adding new functionality.

•Advocate benefits of silicon technology. We intend to continue to educate current and prospective customers about the benefits of our silicon timing systems solutions relative to their existing and future products.

9

•Identify and promote new and emerging applications for our technologies. We intend to continue to collaborate with our end customers to identify timing challenges related to their product roadmaps and to develop innovative solutions to help them realize these products.

•Enable future technology innovation. We plan to continue to apply our MEMS analog and mixed-signal, and systems expertise, as well as partner with leading technology companies to develop innovative products.

10

•Broaden our product portfolio. We intend to continue to broaden our product portfolio by offering additional varieties of oscillators, expanding our business in standalone resonators, and expanding into the clock IC market.

•Continue to attract and acquire new customers. We intend to expand our end customer base by focusing on direct dialogue with large strategic accounts as well as partnerships with large distributors and resellers. We believe this multi-track strategy will allow us to provide differentiated solutions to a broad array of customers.

•Drive margin expansion of our products. We intend to use our technological expertise to deliver higher value and higher margin products. In addition, we intend to continue to reduce our costs through operational improvements and supply-chain management initiatives.

•Offer value on business metrics. In addition to differentiating our solutions based on technical features and value, we also intend to provide value to our customers on business metrics by leveraging our fabless semiconductor infrastructure. These benefits may include shorter lead times, higher quality and reliability, and therefore lower cost of ownership for the end customer.

Our Products

Our silicon timing products are designed to address a wide range of applications across a broad array of end markets. Our product portfolio encompasses oscillators, clock ICs, and resonators. The programmability of our product platforms enables us to generate solutions quickly to customer specifications.

Today, we primarily supply oscillator products that comprise a MEMS resonator and an analog mixed-signal IC that are integrated into a package. The following table illustrates our current portfolio of promoted products by target end market:

11

 

Our Customers

We primarily sell our timing products to distributors and resellers, who in turn sell our products to our end customers. We work closely with our end customers throughout their design cycles and are able to develop long-term relationships as our technology becomes embedded in their products and at times sell directly to our end customers. As a result, we believe our products are well-positioned to be designed into their current systems and we are well-positioned to develop next generation solutions for their future products.

Pernas Electronics Co., Ltd. (“Pernas”) directly accounted for 24%, 26%, and 17% of our revenue for the years ended December 31, 2021, 2020 and 2019, respectively, Quantek Technology Corporation (“Quantek”) directly accounted for 10%, 18%, and 22% of our revenue for the years ended December 31, 2021, 2020, and 2019, respectively and Arrow Electronics, Inc. (“Arrow”) directly accounted for 14%, 15%, and 19% of our revenue for the years ended December 31, 2021, 2020, and 2019, respectively. Other than Pernas, Quantek, and Arrow, no other single customer accounted for more than 10% of our revenue in the years ended December 31, 2021, 2020, and 2019.

Based on the sell-through information provided to us from distributors and resellers who identify end customers, we believe that the majority of our products sold to Pernas and Quantek are in turn incorporated into products of Apple Inc. (“Apple”), our largest end

12

customer. As a result, we believe revenue attributable to our largest end customer accounted for approximately 22%, 40%, and 35% of our revenue for the years ended December 31, 2021, 2020, and 2019, respectively.

Sales and Marketing

Our customers’ design cycle from initial engagement to volume shipment typically ranges from six months to three years, with product life cycles of up to ten years or more. For many of our products, early engagement with our customers’ technical staff is critical for success. To ensure an adequate level of early engagement, our sales, marketing, and customer and development engineers work closely with our customers and channel partners to understand, identify, and propose solutions to their systems’ challenges. We work closely with our customers, including technology leaders such as Nokia for the communications markets, to anticipate end customer market needs. In some cases, we work with our end customers to better understand the end customers’ market trends and new requirements that are being placed on our customers.

We sell our products worldwide through multiple channels, including our direct sales force and a network of distributors, contract manufacturers, contracted sales representatives, resellers, and independent design houses. Our global sales strategy includes direct sales and distributors covering over 15,000 end customer accounts since inception.

We have a strategic accounts strategy with dedicated account owners and our direct sales force focused on key decision-makers to provide high-value solutions for unique customer requirements. We intend to continue to expand our sales and marketing efforts through increased collaboration with our distributors, resellers, and contracted sales representatives. In addition, we intend to introduce a self-service web portal, which will support 24/7 availability and leverage an inside sales team to support a “self-service model” for customers.

We promote our products and brand through various means including digital marketing and online advertising, press releases, contributed articles, speaking opportunities, trade events, customer events, public relations and industry analyst relations.

Seasonality

Our revenue is subject to some seasonal variation. Based on the production schedules of key customers, our products typically see stronger revenue in the second half of our fiscal year. However, there can be no assurance that this trend will continue.

Manufacturing

We operate a fabless business model and use third-party foundries and assembly and test contractors to manufacture, assemble and test our semiconductor products. This outsourced manufacturing approach allows us to focus our resources on the design, sale, and marketing of our products. In addition, we believe that outsourcing many of our manufacturing and assembly activities provides us with the flexibility needed to respond to new market opportunities and scale for customer demand, simplifies our operations, and significantly reduces our capital commitments.

We subject our third-party manufacturing contractors to rigorous qualification requirements to meet the high quality and reliability standards required of our products. We carefully qualify each of our partners and their processes before applying the technology to our products. Our engineers work closely with our foundries and other contractors to increase yield, lower manufacturing costs, and improve product quality.

•Fabrication. We currently utilize a range of semiconductor process generations to develop and manufacture our products. We use Robert Bosch LLC (“Bosch”) in Germany and Taiwan Semiconductor Manufacturing Company (“TSMC”) in Taiwan as our primary foundries and suppliers for our MEMS timing devices and analog mixed-signal circuit ICs, respectively.

•Package, Assembly and Testing. Upon the completion of processing at the foundry, we use third-party contractors for packaging, assembly and testing, including Advanced Semiconductor Engineering, Inc. (“ASE”), Carsem (M) Sdn Bhd. (“Carsem”), and United Test and Assembly Center Ltd. (“UTAC”) in Taiwan, Malaysia, and Thailand, respectively, as well as Daishinku Corp. (“Daishinku”), UTAC, Hana Semiconductor (Ayutthaya) Co., Ltd, and ASE for ceramic packaging for some of our products.

•Warehousing. Our products are warehoused at our outsourced semiconductor assembly and test facilities located in Malaysia, Taiwan, and Thailand.

13

We have a supply agreement with Bosch under which Bosch has agreed to fabricate our MEMS wafers based on purchase orders placed by us. Bosch has discretion whether to accept our purchase orders, and we can terminate purchase orders for convenience by giving written notice prior to shipment. The initial term of the supply agreement is for ten years through February 2027 and automatically renews unless terminated by either party with three years’ advance notice beginning in February 2024. Other than Bosch, we do not have long-term supply agreements with most of our third-party manufacturing contractors, and we purchase products on a purchase order basis.

Research and Development

We believe that our future success depends on our ability to introduce enhancements on our existing products and to develop new products for both existing and new markets. As a result, a significant majority of our operating expenses has been allocated towards this effort. Our research and development efforts are focused primarily on MEMS and advanced clock IC design and advanced system-level integration for timing solutions.

We have assembled a core team of experienced engineers and systems designers who conduct research and development activities in the United States, the Netherlands, Japan, Taiwan, and Ukraine. As of December 31, 2021, we had 85 engineers worldwide (representing approximately 30% of our total employee base).

Intellectual Property

We rely primarily on patent, copyright, trademark, and trade secret laws, as well as confidentiality and non-disclosure agreements, and other contractual protections, to protect our technologies and proprietary know-how. As of December 31, 2021, we had 83 issued U.S. patents, expiring generally between 2026 and 2039, and 38 pending U.S. patent applications. We also had two foreign issued patents expiring in 2035 and four pending foreign patent applications. Our issued patents and pending patent applications generally relate to our MEMS fabrication process, MEMS resonators, circuits, packaging, and oscillator systems.

In addition to our own intellectual property, we also use third-party licenses for certain technologies embedded in our MEMS solutions. For example, we have a license to certain patents from Bosch relating to the design and manufacture of MEMS-based timing applications. The patent rights obtained under the license agreement expire between 2021 and 2029, and the license agreement expires upon expiration of the last patent licensed under the agreement. We do not believe there will be any significant impact upon expiration of these patents.

We generally control access to and use of our confidential information and trade secrets through the use of internal and external controls, including contractual protections with employees, contractors, and customers. We rely in part on the laws of the United States and international laws to protect our work. All employees and consultants are required to execute confidentiality agreements in connection with their employment and consulting relationships with us. We also require them to agree to disclose and assign to us all inventions conceived or made in connection with the employment or consulting relationship. However, we cannot guarantee that we have entered into such agreements with every such party and we may not have adequate remedies in case of a breach of any such agreements. Our trade secrets could be disclosed to our competitors or others may independently develop substantially equivalent technologies or otherwise gain access to our trade secrets. Trade secrets can be difficult to protect and some courts inside and outside of the United States are less willing or unwilling to protect trade secrets. Despite our efforts to protect our intellectual property, unauthorized parties may still copy, misappropriate, or otherwise obtain and use our software, technology, or other information that we regard as our proprietary intellectual property. In addition, we intend to expand our international operations, and effective patent, copyright, trademark, and trade secret, and other intellectual property protection may not be available or may be limited in some foreign countries.

14

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights and positions, which has resulted in protracted and expensive litigation for many companies. We have in the past received, and we may in the future receive, communications alleging liability for damages or challenging the validity of our intellectual property or proprietary rights. Any litigation, regardless of success or merit, could cause us to incur substantial expenses, reduce our sales, and divert the efforts of our management and other personnel. In the event we receive an adverse result in any litigation, we could be required to pay substantial damages, seek licenses from third parties, which may not be available on reasonable terms or at all, cease sale of products, expend significant resources to develop alternative technology, or discontinue the use of processes requiring the relevant technology.

Competition

The global semiconductor market in general, and the timing market in particular, is highly competitive. We compete in different target markets based on a number of competitive factors. We expect competition to increase and intensify as additional companies enter our markets and as internal resources of large original equipment manufacturers (“OEMs”) grow. Increased competition could result in price pressure, reduced gross margins, and loss of market share, any of which could harm our business, financial condition, and results of operations.

Our competitors range from large, international companies offering a wide range of timing products to smaller companies specializing in narrow market verticals. In the MEMS-based oscillator market, we primarily compete against Microchip Technology Inc. (“MCHP”) through their acquisition of Micrel, Incorporated. In the MEMS-based resonator market, we primarily compete against Murata Manufacturing Co., Ltd. In the analog mixed-signal IC and clocking market, we primarily compete against Renesas Electronics Corporation (through their acquisition of Integrated Device Technology, Inc.), Silicon Laboratories Inc., Texas Instruments Incorporated, Micrel (which is owned by MCHP), and Analog Devices, Inc. In the oscillator market, we primarily compete against quartz crystal suppliers such as Rakon Limited, Daishinku Corporation, Nihon Dempa Kogyo Co., Ltd., TXC Corporation, Seiko Epson Corporation, Kyocera Corporation and Vectron International (which is owned by MCHP). These quartz crystal suppliers typically own their own quartz manufacturing facilities.

Our ability to compete successfully depends on elements both within and outside of our control, including industry and general economic trends. During past periods of downturns in our industry, competition in the markets in which we operate intensified as our customers reduced their purchase orders. Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support, and other resources, are more established than we are, and have significantly better brand recognition and broader product offerings which may enable them to better withstand similar adverse economic or market conditions in the future. Any such development may materially and adversely affect our current and future target markets and our ability to compete successfully in those markets. We maintain our competitive position through our ability to successfully design, develop, and market complex timing solutions for the customers we serve.

Government Regulation

Our business activities are worldwide and subject to various federal, state, local and foreign regulations and our products are governed by a number of rules and regulations. To date, our compliance with these regulations has not had a material impact on our results of operations.

Human Capital Resources and Empowerment

We believe that our company culture, which promotes innovation, open communication, and teamwork, has been critical to our success. Our success depends largely upon the continued services of our executive officers and other key employees and on our ability to continue to attract, retain and motivate qualified employees, particularly highly-skilled engineers involved in the design, development, support and manufacture of new and existing products and processes and our sales and marketing team which is critical to achieving design wins, creating our brand awareness and reputation, and building long-lasting relationships with our customers and other industry participants. In order for us to attract the best talent, we aim to offer challenging work in an environment that enables our employees to learn, grow, and reach their full potential.

Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and future employees. We strive to attract and retain the most talented employees in the industry and across the globe by offering competitive compensation and benefits that support their health, financial, and emotional well-being. Our compensation philosophy is based on rewarding each employee’s individual contributions. We use a combination of fixed and variable pay including base salary,

15

bonuses, performance awards and stock-based compensation. The principal purposes of our equity incentive plans are to attract, retain, and motivate selected employees through the granting of stock-based compensation awards. We offer employees benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace. Examples of benefits offered in the U.S. include: a 401(k) plan with employer contributions; health benefits; life, business travel and disability insurance; additional voluntary insurance; paid time off and parental leave, and paid counseling assistance. For further information concerning our equity incentive plans, see Note 9, Stock-based Compensation, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.

We are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of health and wellness programs, including benefits that support their physical and mental health. In response to the COVID-19 pandemic, we implemented safety measures designed to protect our employees. We believe we have been able to preserve our business continuity without sacrificing our commitment to keeping our employees safe during the COVID-19 pandemic.

We regularly review our employees and assess the needs of the business to identify our talent needs. We encourage all employees to continue learning and provide internal opportunities for cross functional work to support this. We regularly review succession plans and focus on promoting internal talent to help grow our employees' careers.

We conducted a survey in fiscal 2020 and had a participation rate of over 80% of all our employees and the survey results indicated that we excel in areas including initiative, empowerment, opportunities to learn and grow, and overall culture.

As of December 31, 2021, we had 279 full-time equivalent employees located in the United States, France, Malaysia, the Netherlands, Taiwan, Japan and Ukraine, including 137 in research and development, 109 in sales, general, and administrative, and 33 in operations. We consider relations with our employees to be good and have never experienced a work stoppage.

Corporate Information

We were incorporated in Delaware on December 3, 2003. Our principal executive offices are located at 5451 Patrick Henry Drive, Santa Clara, California 95054, and our telephone number is (408) 328-4400. Our corporate website address is www.sitime.com. Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K. Unless the context requires otherwise, references in this Annual Report on Form 10-K to “SiTime,” “the company,” “we,” “us” and “our” refer to SiTime Corporation and its wholly-owned subsidiaries on a consolidated basis.

Available Information

Our website is located at https://www.sitime.com. Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities and Exchange Commission (the “SEC”). The SEC also maintains a website that contains our SEC filings. The address of the website is www.sec.gov.

Item 1A. Risk Factors.

Risks Related to Our Business and Our Industry

The COVID-19 pandemic could adversely affect our business, results of operations, and financial condition.

The effects of the ongoing COVID-19 pandemic on our business are evolving and difficult to predict. To date, the COVID-19 pandemic has significantly and negatively impacted the global economy and it is unclear how long the pandemic will continue to do so. To combat the spread of COVID-19, the United States and other foreign countries in which we operate have from time to time imposed measures such as quarantines and “shelter-in-place” orders that restrict business operations and travel and require individuals to work from home (“WFH”), which has impacted all aspects of our business as well as those of the third-parties we rely upon for our manufacturing, assembly, testing, shipping, and other operations. Among other things, the continued COVID-19 pandemic may result in:

16

•a global economic recession or depression that could significantly reduce demand and/or prices for our products;

•reduced productivity in our product development, operations, marketing, sales, and other activities;

•disruptions to our supply chain;

•increased costs resulting from WFH or from our efforts to mitigate the impact of the COVID-19 pandemic;

•reduced access to financing to fund our operations due to a deterioration of credit and financial markets; or

•higher rate of losses on our accounts receivables due to credit defaults.

The COVID-19 pandemic has also caused significant uncertainty and volatility in global financial markets and the trading prices for the common stock of technology companies, including us. Due to such volatility, we may not be able to raise additional capital, if needed, on favorable terms, or at all. Further adverse economic events resulting from the COVID-19 pandemic, including a recession, depression, or other sustained economic downturn, could materially and adversely affect our business, access to capital markets, and the value of our common stock.

In addition, given the inherent uncertainty surrounding COVID-19 due to rapidly changing governmental directives, public health challenges, and economic disruption and the duration of the foregoing, the potential impact that the COVID-19 pandemic could have on the other risk factors described in this “Risk Factors” section remain unclear.

As a result of the COVID-19 pandemic, we believe we have experienced some delay and disruption in the manufacture, shipment, and sales of our products. In addition, we believe the production capabilities of our suppliers has been, and will likely continue to be, impacted as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or WFH orders. Further, as WFH orders terminate and individuals return to work in offices, we may experience a reduction in demand for certain of our products that are incorporated in our customers’ products that experienced higher demand as a result of the increase in WFH during the COVID-19 pandemic. The continued disruption in the manufacture, shipment and sales of our products may negatively and materially impact our operating results. The resumption of normal business operations after such disruptions may be delayed and resurgences of COVID-19 could result in continued disruption to us, our suppliers, and/or our customers. As a result, the effects of the COVID-19 pandemic could have a material adverse impact on our business, results of operations, and financial condition in the future.

A downturn in the worldwide economy may harm our business.

The COVID-19 pandemic could cause an extended downturn in the worldwide economy, which would likely result in reduced demand for our products and our customers’ products. Reduced demand for our products could result in significant decreases in sales and margins. In addition, the deterioration in credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures. We may experience losses on our holdings of cash and investments due to failures of financial institutions and other parties. Adverse economic conditions may also result in a higher rate of losses on our accounts receivables due to credit defaults. As a result, a downturn in the worldwide economy could have a material adverse effect on our business, results of operations, and financial condition.

We depend on third parties for our wafer fabrication, assembly, packaging, and testing operations, which exposes us to certain risks that may harm our business.

We operate an outsourced manufacturing business model. As a result, we rely on third parties for all of our manufacturing operations, including wafer fabrication, assembly, packaging, and testing. Although we use multiple third-party supplier sources, we depend on these third parties to supply us with material of a requested quantity in a timely manner that meets our standards for yield, cost, and manufacturing quality. The manufacturing processes of our third-party suppliers for our products require specialized technology that requires certain raw and engineered materials. Many major components, product equipment items, engineered materials, and raw materials, that are procured or subcontracted by our third-party suppliers for manufacturing of our products are procured or subcontracted on a single or sole-source basis. Except for our agreement with Bosch for MEMS wafers, we do not have any long-term supply agreements with any of our other manufacturing suppliers. These third-party manufacturers often serve customers that are larger than us or require a greater portion of their services, which may decrease our relative importance and negotiating leverage with these third parties.

If market demand for wafers or production and assembly materials increases, if a supplier of our wafers fails to procure materials needed for manufacture of our products, or if a supplier of our wafers ceases or suspends operations, our supply of wafers and other materials could become limited. We currently have a ten-year supply agreement with Bosch for the fabrication of our MEMS wafers. This agreement expires in 2027 and may be terminated with three years’ advance notice beginning in February 2024. We currently rely on Bosch for our MEMS fabrication, and TSMC for our analog circuits fabrication, and any disruption in their supply of wafers or

17

any increases in their wafer or materials prices could adversely affect our gross margins and our ability to meet customer demands in a timely manner, or at all, and lead to reduced revenue. There are currently a number of industry-wide supply constraints affecting the supply of analog circuits manufactured by certain foundries, including TSMC, and affecting outsourced semiconductor assembly and test providers (“OSATs”), which has limited and may continue to limit our ability to fully satisfy an increase in demand for some of our products. Moreover, wafers constitute a large portion of our product cost. If we are unable to negotiate volume discounts or otherwise purchase wafers at favorable prices and in sufficient quantities in a timely manner, our ability to ship our solutions to our customers on time and in the quantity required could be adversely affected, which in turn could cause an unanticipated decline in our sales, harm to our customer relationships, and our gross margins to be adversely affected.

To ensure continued wafer supply, we may be required to establish alternative wafer supply sources, which could require significant expenditures and limit our negotiating leverage. We currently rely on Bosch and TSMC as our primary foundries and suppliers for our MEMS timing devices and analog circuits, respectively, and only a few foundry vendors have the capability to manufacture our most advanced solutions, in particular with respect to our MEMS solution. If we engage alternative supply sources, we may incur additional costs and encounter difficulties and/or delays in qualifying the supply sources. For example, we have a license agreement with Bosch under which Bosch granted us a license to use certain patents. Under this agreement, we are required to pay a royalty fee to Bosch if we engage third parties to manufacture, or if we decide to manufacture ourselves, certain generations of our MEMS wafers through March 31, 2024. In addition, shipments could be significantly delayed while these sources are qualified for volume production. If we are unable to maintain our relationship with Bosch or TSMC, our ability to produce high-quality products could suffer, which in turn could harm our business, financial condition, and results of operations.

We currently primarily rely on Advanced Semiconductor Engineering, Inc. (“ASE”), Carsem (M) Sdn. Bhd. (“Carsem”), and United Test and Assembly Center Ltd. (“UTAC”) for assembly and testing, as well as Daishinku Corp. (“Daishinku”) and UTAC for ceramic packaging for some of our products. We enter into capacity agreements with certain of our OSATs from time to time which may adversely impact our gross margins and results of operations if we do not purchase required minimum quantities.

Certain of our manufacturing, packaging, assembly, and testing facilities are located outside of the United States, including Malaysia, Taiwan, and Thailand, where we are subject to increased risk of political and economic instability, difficulties in managing operations, difficulties in enforcing contracts and our intellectual property, severe weather, and employment and labor difficulties. Additionally, public health crises, such as an outbreak of contagious diseases like the COVID-19 pandemic, may affect the production capabilities of our suppliers, including as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or work-from-home orders. Restrictions like these could limit our suppliers’ ability to operate their manufacturing facilities.

Any of these factors could result in manufacturing and supply problems, and delays in our ability to provide our solutions to our customers on a timely basis, or at all. If we experience manufacturing problems at a particular location, we may be required to transfer manufacturing to a new location or supplier. Converting or transferring manufacturing from a primary location or supplier to a backup facility could be expensive and could take several quarters or more. During such a transition, we would be required to meet customer demand from our then-existing inventory, as well as any partially finished goods that could be modified to the required product specifications. In addition, our end customers may require requalification with a new wafer manufacturer. We typically maintain at least a three-month supply of our MEMS wafers for which Bosch is our primary supplier. We do not otherwise maintain sufficient inventory to address a lengthy transition period. As a result, we may not be able to meet customer needs during such a transition, which could damage our customer relationships. Although we maintain business disruption insurance, this insurance may not be adequate to cover any losses we may experience as a result of such difficulties.

If one or more of the third parties we rely on for our manufacturing operations terminates its relationship with us, or if we encounter any problems with our manufacturing supply chain, our ability to ship our solutions to our customers on time and in the quantity required would be adversely affected, which in turn could cause an unanticipated decline in our sales, harm to our customer relationships and loss of customers.

A portion of our operations is located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.

We outsource the fabrication and assembly of all of our products to third parties that are primarily located in Germany and Asia. In addition, we conduct research and development activities in the United States, Japan, the Netherlands, Taiwan, and Ukraine and work with third-party contractors in Russia. We also conduct marketing and administrative functions in the United States, Japan, the Netherlands, China, Taiwan, Malaysia, and Ukraine. Certain of the critical functions for our business are performed in locations outside of the United States. In addition, members of our sales force are located in various locations outside of the United States. In addition, approximately 94%, 93% and 93% of our revenue for the years ended December 31, 2021, 2020 and 2019, respectively, was from distributors with ship-to locations outside the United States, although we believe the majority of our end customers are based in

18

the U.S. based on sell-through information provided by these distributors. As a result of our international focus, we face numerous challenges and risks, including:

•complexity and costs of managing international operations, including manufacturing, assembly, and testing of our products and associated costs;

•geopolitical and economic instability and military conflicts;

•limited protection for, and vulnerability to theft of, our intellectual property rights, including our trade secrets;

•compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations;

•trade and foreign exchange restrictions and higher tariffs, including the ongoing trade tensions between the U.S. and China that has resulted in higher tariffs on certain semiconductor products;

•timing and availability of import and export licenses and other governmental approvals, permits, and licenses, including export classification requirements;

•foreign currency fluctuations and exchange losses relating to our international operating activities;

•restrictions imposed by the U.S. government or foreign governments on our ability to do business with certain companies or in certain countries as a result of international political conflicts or the COVID-19 pandemic and the complexity of complying with those restrictions;

•transportation delays and other consequences of limited local infrastructure, and disruptions, such as large scale outages or interruptions of service from utilities or telecommunications providers;

•difficulties in staffing international operations;

•changes in immigration policies which may impact our ability to hire personnel;

•local business and cultural factors that differ from our normal standards and practices;

•differing employment practices and labor relations;

•requirements in foreign countries which may impact availability of personnel, such as mandatory military service in countries such as Ukraine;

•heightened risk of terrorist acts;

•regional health issues and the impact of public health epidemics on employees and the global economy, such as the worldwide COVID-19 pandemic;

•power outages and natural disasters; and

•travel, work-from-home or other restrictions or stoppages, like those currently imposed by governments around the world as a result of the COVID-19 pandemic.

These risks could harm our international operations, delay new product releases, increase our operating costs, and hinder our ability to grow our operations and business and, consequently, our business, financial condition, and results of operations could suffer. For example, we rely on TSMC in Taiwan for the fabrication of our analog circuits and have sales force personnel in Taiwan and China. If political tensions between China and Taiwan were to increase further, it could disrupt our business and adversely affect our financial condition and results of operations given that we rely primarily on TSMC in Taiwan for our analog circuits. In addition, given the current political and military situation in Russia and Ukraine, or if the relationship between Russia and the United States worsens further, or if either Russia or the United States imposes significant new economic sanctions or restrictions on doing business, and we are restricted or precluded from continuing our operations in Russia or Ukraine, it could disrupt our business, our costs could increase, and our product development efforts, business, financial condition, and results of operations could be significantly harmed. Further, the ongoing COVID-19 pandemic has led to travel, work-from-home, and other restrictions, which has significantly impacted our domestic and international operations and the operations of our suppliers, distributors, partners, and customers. At this point, the extent to which the COVID-19 pandemic may impact our business remains uncertain but it may materially adversely affect our business, financial condition or results of operations.

19

We currently depend on one end customer for a large portion of our revenue. The loss of, or a significant reduction in orders from our customers, including this end customer, could significantly reduce our revenue and adversely impact our operating results.

We believe that our operating results for the foreseeable future will continue to depend to a significant extent on revenue attributable to Apple, our largest end customer. Sales attributable to this end customer have historically accounted for a large portion of our revenue and accounted for approximately 22%, 40% and 35% of our revenue for the years ended December 31, 2021, 2020 and 2019, respectively. Revenue attributable to this end customer increased from 2019 to 2020 and increased in absolute dollars but decreased as a percentage of revenue from years ended December 31, 2020 to 2021. We anticipate revenue attributable to this customer will fluctuate from period to period, although we expect to remain dependent on this end customer for a substantial portion of our revenue for the foreseeable future. Although we sell our products to this customer through distributors on a purchase order basis, including Pernas Electronics Co., Ltd. (“Pernas”), Arrow Electronics, Inc. (“Arrow”), and Quantek Technology Corporation (“Quantek”), we have a development and supply agreement, which provides a general framework for certain transactions with Apple. This agreement continues until either party terminates for material breach. Under this agreement, we have agreed to develop and deliver new products to this end customer at its request, provided it also meets our business purposes, and have agreed to indemnify it for intellectual property infringement or any injury or damages caused by our products. This end customer does not have any minimum or binding purchase obligations to us under this agreement and could elect to discontinue making purchases from us with little or no notice. If our end customers were to choose to work with other manufacturers or our relationships with our customers is disrupted for any reason, it could have a significant negative impact on our business. Any reduction in sales attributable to our larger customers, including our largest end customer, would have a significant and disproportionate impact on our business, financial condition, and results of operations.

Because most of our sales are made pursuant to standard purchase orders, orders may be cancelled, reduced, or rescheduled with little or no notice and without penalty. Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from our customers expose us to the risks of inventory shortages or excess inventory. This in turn could cause our operating results to fluctuate.

Our end customers, or the distributors through which we sell to these customers, may choose to use products in addition to ours, use a different product altogether, or develop an in-house solution. In addition, the inability of our customers or their contract manufacturers to obtain sufficient supplies of third-party components used with our products could result in a decline in the demand of our products and a loss of sales. Any of these events could significantly harm our business, financial condition, and results of operations. In addition, if our distributors’ relationships with our end customers, including our larger end customers, are disrupted for inability to deliver sufficient products or for any other reason, it could have a significant negative impact on our business, financial condition, and results of operations.

If we are unable to expand or further diversify our customer base, our business, financial condition, and results of operations could suffer.

We sell our products primarily through distributors and resellers, who in turn sell to our end customers. We also sell directly to our end customers. For the years ended December 31, 2021, 2020 and 2019, our top three distributors by revenue together accounted for approximately 48%, 59%, and 59% of our revenue, respectively. Based on our shipment information, we believe that revenue attributable to our ten largest end customers accounted for 49%, 58%, and 57% of our revenue in the years ended December 31, 2021, 2020 and 2019, respectively. Sales attributable to our largest end customer accounted for approximately 22%, 40%, and 35%, respectively of our revenue for the years ended December 31, 2021, 2020 and 2019, respectively. We expect the composition of our largest end customers to vary from period to period, and that revenue attributable to our largest ten end customers in any given period may decline over time. Our relationships with existing customers may deter potential customers who compete with these customers from buying our silicon timing systems solutions. If we are unable to expand or further diversify our customer base, it could harm our business, financial condition, and results of operations.

Because we do not have long-term purchase commitments with our customers, orders may be cancelled, reduced, or rescheduled with little or no notice, which in turn exposes us to inventory risk, and may cause our business and results of operations to suffer.

We sell our products primarily through distributors and resellers, with no long-term or minimum purchase commitments from them or their end customers. Substantially all of our sales to date have been made on a purchase order basis, which orders may be cancelled, changed, or rescheduled with little or no notice or penalty. As a result, our revenue and operating results could fluctuate materially and could be materially and disproportionately impacted by purchasing decisions of our customers, including our larger customers. In the future, our distributors or their end customers may decide to purchase fewer units than they have in the past, may alter their purchasing patterns at any time with limited or no notice, or may decide not to continue to purchase our silicon timing systems solutions at all, any of which could cause our revenue to decline materially and materially harm our business, financial condition, and results of operations. Cancellations of, reductions in, or rescheduling of customer orders could also result in the loss of anticipated sales without

20

allowing us sufficient time to reduce our inventory and operating expenses, as a substantial portion of our expenses are fixed at least in the short term. In addition, changes in forecasts or the timing of orders expose us to the risks of inventory shortages or excess inventory. As we no longer intend to acquire inventory to pre-build custom products, we may not be able to fulfill increased demand in the short term. Any of the foregoing events could materially and adversely affect our business, financial condition, and results of operations.

Our revenue and operating results may fluctuate from period to period, which could cause our stock price to fluctuate.

Our revenue and operating results have fluctuated in the past and may fluctuate from period to period in the future due to a variety of factors, many of which are beyond our control. We expect our revenue to fluctuate in the future primarily based on the volume of shipments of our products and average selling price ("ASP") changes. Though our ASP increased in 2021 compared to 2020, we may not be able to sustain ASP increases in the future. Factors relating to our business that may contribute to fluctuations in our operating results include the following factors, as well as other factors described elsewhere in this report:

•the impact of the COVID-19 pandemic on our business, suppliers, and customers;

•customer demand and product life cycles;

•the receipt, reduction, or cancellation of, or changes in the forecasts or timing of, orders by customers;

•fluctuations in the levels of inventories held by our distributors or end customers;

•the gain or loss of significant customers;

•supply chain disruptions, delays, shortages, and capacity limitations as a result of the COVID-19 pandemic or other reasons;

•market acceptance of our products and our customers’ products;

•our ability to develop, introduce, and market new products and technologies on a timely basis;

•the timing and extent of product development costs;

•new product announcements and introductions by us or our competitors;

•our research and development costs and related new product expenditures and our ability to achieve cost reductions in a timely or predictable manner;

•seasonality and fluctuations in sales by product manufacturers that incorporate our silicon timing systems solutions into their products;

•end-market demand into which we have limited insight, including cyclicality, seasonality, and the competitive landscape;

•cyclical fluctuations in the semiconductor market;

•fluctuations in our manufacturing yields;

•significant warranty claims, including those not covered by our suppliers; and

•new accounting pronouncements or changes in existing accounting standards

•changes in our pricing, product cost, and product mix.

As a result of these and other factors, you should not rely on the results of any prior quarterly or annual periods, or any historical trends reflected in such results, as indications of our future revenue or operating performance. Fluctuations in our revenue and operating results could cause our stock price to decline and, as a result, you may lose some or all of your investment.

Our success and future revenue depend on our ability to achieve design wins and to convince our current and prospective customers to design our products into their product offerings. If we do not continue to win designs or our products are not designed into our customers’ product offerings, our results of operations and business will be harmed.

We sell our silicon timing systems solutions to customers who select our solutions for inclusion in their product offerings. This selection process is typically lengthy and may require us to incur significant design and development expenditures and dedicate scarce engineering resources in pursuit of a single design win with no assurance that our solutions will be selected. If we fail to convince our current or prospective customers to include our products in their product offerings or to achieve a consistent number of design wins, our business, financial condition, and results of operations will be harmed.

21

Because of our extended sales cycle, our revenue in future years is highly dependent on design wins we are awarded in prior years. It is typical that a design win will not result in meaningful revenue for a year or more, if at all. If we do not continue to achieve design wins in the short term, our revenue in the following years will deteriorate.

Further, a significant portion of our revenue in any period may depend on a single product design win with a large customer. As a result, the loss of any key design win or any significant delay in the ramp of volume production of the customer’s products into which our product is designed could adversely affect our business, financial condition, and results of operations. We may not be able to maintain sales to our key customers or continue to secure key design wins for a variety of reasons, and our customers can stop incorporating our products into their product offerings with limited notice to us and suffer little or no penalty.

If we fail to anticipate or respond to technological shifts or market demands, or to timely develop new or enhanced products or technologies in response to the same, it could result in decreased revenue and the loss of our design wins to our competitors. Due to the interdependence of various components in the systems within which our products and the products of our competitors operate, customers are unlikely to change to another design, once adopted, until the next generation of a technology. As a result, if we fail to introduce new or enhanced products that meet the needs of our customers or penetrate new markets in a timely fashion, and our designs do not gain acceptance, we will lose market share and our competitive position.

The loss of a key customer or design win, a reduction in sales to any key customer, a significant delay or negative development in our customers’ product development plans, or our inability to attract new significant customers or secure new key design wins could seriously impact our revenue and materially and adversely affect our business, financial condition, and results of operations.

We may experience difficulties demonstrating the value to customers of newer solutions if they believe existing solutions are adequate to meet end customer expectations. If we are unable to sell new generations of our product, our business would be harmed.

As we develop and introduce new solutions, we face the risk that customers may not value or be willing to bear the cost of incorporating these newer solutions into their product offerings, particularly if they believe their customers are satisfied with prior offerings. Regardless of the improved features or superior performance of the newer solutions, customers may be unwilling to adopt our new solutions due to design or pricing constraints. Because of the extensive time and resources that we invest in developing new solutions, if we are unable to sell new generations of our solutions, our revenue could decline and our business, financial condition, and results of operations would be negatively affected.

Some of our customer and other third-party agreements provide for joint and/or custom product development, which subject us to a number of risks, and any failure to execute on any of these arrangements could have a material adverse effect on our business, results of operations, and financial condition.

We have entered into development, product collaboration and technology licensing arrangements with some of our customers and other third parties, and we expect to enter into new arrangements of these kinds from time to time in the future. These agreements may increase risks for us, such as the risks related to timely delivery of new products, risks associated with the ownership of the intellectual property developed, risks that such activities may not result in products that are commercially successful or available in a timely fashion, and risks that third parties involved may abandon or fail to perform their obligations related to such agreements. In addition, such arrangements may provide for exclusivity periods during which we may only sell specified products or technologies to that particular customer. Any failure to timely develop commercially successful products under such arrangements as a result of any of these and other challenges could have a material adverse effect on our business, results of operations, and financial condition.

The success of our products is dependent on our customers’ ability to develop products that achieve market acceptance, and our customers’ failure to do so could negatively affect our business.

The success of our silicon timing systems solutions is heavily dependent on the timely introduction, quality, and market acceptance of our customers’ products incorporating our solutions, which are impacted by factors beyond our control. Our customers’ products are often very complex and subject to design complexities that may result in design flaws, as well as potential defects, errors, and bugs. We have in the past been subject to delays and project cancellations as a result of design flaws in the products developed by our customers, changing market requirements, such as the customer adding a new feature, or because a customer’s product fails their end customer’s evaluation or field trial. In other cases, customer products are delayed due to incompatible deliverables from other vendors. We incur significant design and development costs in connection with designing our products for customers’ products that may not ultimately achieve market acceptance. If our customers discover design flaws, defects, errors, or bugs in their products, or if they experience changing market requirements, failed evaluations or field trials, or incompatible deliverables from other vendors, they may delay, change, or cancel a project, and we may have incurred significant additional development costs and may not be able to recoup our costs, which in turn would adversely affect our business, financial condition, and results of operations.

22

Our target customer and product markets may not grow or develop as we currently expect, and if we fail to penetrate new markets and scale successfully within those markets, our revenue and financial condition would be harmed.

Our target markets include the communications and enterprise, automotive, industrial, aerospace, and mobile, IoT, and consumer markets. Substantially all of our revenue for the years ended December 31, 2021, 2020 and 2019 was derived from sales in the IoT and mobile, industrial, and consumer markets. In 2017, we began introducing products for the automotive market. In addition, within the timing market, substantially all of our revenue to date has been attributable to sales of MEMS oscillators. We intend to focus on clock IC and timing sync solutions in the future. Any deterioration in our target customer or product markets or reduction in capital spending to support these markets could lead to a reduction in demand for our products, which would adversely affect our revenue and results of operations. Further, if our target customer markets, including the 5G communications or IoT and mobile markets, do not grow or develop in ways that we currently expect, demand for our technology may not materialize as expected, which would also negatively impact our business, financial condition, and results of operations.

We may be unable to predict the timing or development of trends in our target markets with any accuracy. If we fail to accurately predict market requirements or market demand for these solutions, our business will suffer. A market shift towards an industry standard that we may not support could significantly decrease the demand for our solutions.

Our future revenue growth, if any, will depend in part on our ability to expand within our existing markets, our ability to continue to penetrate emerging markets, such as the 5G communications market, which we entered in 2019, and our ability to enter into new markets, such as the industrial, medical, and military markets. Each of these markets presents distinct and substantial challenges and risks and, in many cases, requires us to develop new customized solutions to address the particular requirements of that market. Meeting the technical requirements and securing design wins in any of these new markets will require a substantial investment of our time and resources. We cannot assure you that we will secure design wins from these or other new markets, or that we will achieve meaningful revenue from sales in these markets. If any of these markets do not develop as we currently anticipate or if we are unable to penetrate them and scale in them successfully, our revenue could decline.

The average selling prices of our individual products have fluctuated historically over time and may do so in the future, which could harm our revenue and gross margins.

Although on average selling prices of our products have increased over time as we introduce higher end products, the average selling prices of our individual products generally decrease over time. Our revenue is derived from sales to large distributors and, in some cases, we have agreed in advance to price reductions, generally over a period of time ranging from two months to three years, once the specified product begins to ship in volume. However, our customers may change their purchase orders and demand forecasts at any time with limited notice due in part to fluctuating end-market demand, which can sometimes lead to price renegotiations. Although these price renegotiations can sometimes result in the average selling prices of the specified product fluctuating over the shorter term, we expect average selling prices of individual products generally to decline over the longer term as that product and our end customers’ products mature.

We seek to offset the anticipated reductions in our average selling prices of individual products by reducing the cost of our products through improvements in manufacturing yields and lower wafer, assembly, and testing costs, developing new products, enhancing lower-cost products on a timely basis, and increasing unit sales. However, if we are unable to offset these anticipated reductions in our average selling prices, our business, financial condition, and results of operations could be negatively affected.

If we are not able to successfully introduce and ship in volume new products in a timely manner, our business and revenue will suffer.

We have developed products that we anticipate will have product life cycles of ten years or more, as well as other products in more volatile high growth or rapidly changing areas, which may have shorter life cycles. Our future success depends, in part, on our ability to develop and introduce new technologies and products that generate new sources of revenue to replace, or build upon, existing revenue streams. If we are unable to repeatedly introduce, in successive years, new products that ship in volume, or if our transition to these new products does not successfully occur prior to any decrease in revenue from our prior products, our revenue will likely decline significantly and rapidly.

Our gross margins may fluctuate due to a variety of factors, which could negatively impact our results of operations and our financial condition.

Our gross margins may fluctuate due to a number of factors, including customer and product mix, market acceptance of our new products, timing and seasonality of the end-market demand, yield, wafer pricing, packaging, and testing costs, competitive pricing dynamics, the impact of the COVID-19 pandemic, and geographic and market pricing strategies.

23

To attract new customers or retain existing customers, we have in the past and will in the future offer certain customers favorable prices, which would decrease our average selling prices and likely impact gross margins. Further, we may also offer pricing incentives to our customers on earlier generations of products that inherently have a higher cost structure, which would negatively affect our gross margins. In addition, in the event our customers, including our larger end customers, exert more pressure with respect to pricing and other terms with us, it could put downward pressure on our margins.

Because we do not operate our own manufacturing, assembly, or testing facilities, we may not be able to reduce our costs as rapidly as companies that operate their own facilities, and our costs may even increase, which could further reduce our gross margins. For instance, we expect to see increases in our manufacturing costs in fiscal year 2022 due to an industry wide increase in costs. We rely primarily on obtaining yield improvements and volume-based cost reductions to drive cost reductions in the manufacture of existing products, introducing new products that incorporate advanced features and optimize die size, and other price and performance factors that enable us to increase revenue while maintaining gross margins. To the extent that such cost reductions or revenue increases do not occur at a sufficient level and in a timely manner, our business, financial condition, and results of operations could be adversely affected.

In addition, we maintain an inventory of our products at various stages of production and in some cases as finished good inventory. We hold these inventories in anticipation of customer orders. If those customer orders do not materialize in a timely manner, we may have excess or obsolete inventory which we would have to reserve or write-down, and our gross margins would be adversely affected.

Our revenue in recent periods may not be indicative of future performance and our revenue may fluctuate over time.

Our recent revenue should not be considered indicative of our future performance. For the years ended December 31, 2021, 2020 and 2019, our revenue was $218.8 million, $116.2 million, and $84.1 million, respectively. You should not rely on our revenue for any previous quarterly or annual periods as any indication of our revenue for future fiscal periods. As we grow our business, our revenue may fluctuate in future periods due to a number of reasons, which may include slowing demand for our products, increasing competition, the impact of the COVID-19 pandemic, a decrease in the growth of our overall market or market saturation, and our failure to capitalize on growth opportunities.

If we are unable to manage our growth effectively, we may not be able to execute our business plan and our operating results could suffer.

In order to succeed in executing our business plan, we will need to manage our growth effectively as we make significant investments in research and development and sales and marketing, and expand our operations and infrastructure both domestically and internationally. If our revenue does not increase to offset these increases in our expenses, we may not achieve or maintain profitability in future periods.

To manage our growth effectively, we must continue to expand our operations, engineering, financial accounting, internal management, and other systems, procedures, and controls. This may require substantial managerial and financial resources, and our efforts may not be successful. Any failure to successfully implement systems enhancements and improvements will likely have a negative impact on our ability to manage our expected growth, as well as our ability to ensure uninterrupted operation of key business systems and compliance with the rules and regulations applicable to public companies. If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new silicon timing systems solutions, and we may fail to satisfy customer product or support requirements, maintain the quality of our solutions, execute our business plan or respond to competitive pressures, any of which could negatively affect our business, financial condition, and results of operations.

Our customers require our products and our third-party contractors to undergo a lengthy and expensive qualification process, which does not assure product sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, our business and operating results would suffer.

Prior to purchasing our silicon timing systems solutions, our customers require that both our solutions and our third-party contractors undergo extensive qualification processes, which involve testing of our products in the customers’ systems, as well as testing for reliability. This qualification process may continue for several months. However, qualification of a product by a customer does not assure any sales of the product to that customer. Even after successful qualification and sales of a product to a customer, a subsequent revision in our third-party contractors’ manufacturing process or our selection of a new supplier may require a new qualification process with our customers, which may result in delays and in our holding excess or obsolete inventory. After our products are qualified, it can take several months or more before the customer commences volume production of components or systems that incorporate our products. Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing, and management efforts, to qualifying our products with customers in anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of those products to the customer may be precluded or delayed, which would cause our business, financial condition, and results of operations to suffer.

24

We provide a lifetime warranty on our products and may be subject to warranty or product liability claims, which could result in unexpected expenses and loss of market share.

We provide a lifetime warranty on our products and generally agree to indemnify our customers for defects in our products or failure of our products to meet our product specifications. Defects in our products could make our products unsafe and create a risk of property damage or personal injury. These risks may increase where our products are incorporated into specialized end products in industries such as automotive, aerospace, defense, and medical device. We may be subject to warranty or product liability claims. These claims may require us to make significant expenditures to defend those claims, replace our solutions, refund payments, or pay damage awards. This risk is exacerbated by the lifetime warranty of our products, which exposes us to warranty claims for the entire product lifecycle.

Our silicon timing systems solutions have only been incorporated into end products since 2008. Accordingly, the operation of our products and technology has not been validated over longer periods. If a customer’s product fails in use, the customer may incur significant monetary damages, including a product recall or associated replacement expenses as well as lost revenue. The customer may claim that a defect in our product caused the product failure and assert a claim against us to recover monetary damages. In certain situations, circumstances might warrant that we consider incurring the costs or expenses related to a recall of one of our products in order to avoid the potential claims that may be raised should a customer reasonably rely upon our product and suffer a failure due to a design or manufacturing process defect. In addition, the cost of defending these claims and satisfying any arbitration award or judgment with respect to these claims would result in unexpected expenses, which could be substantial, and could harm our business, financial condition, and results of operations. Although we carry product liability insurance, this insurance is subject to significant deductibles and may not adequately cover our costs arising from defects in our products or otherwise.

Defects in our products or failures to meet product specifications could harm our relationships with our customers and damage our reputation.

Our products must meet demanding specifications for quality, performance, and reliability. Defects in our products or failure of our products to meet required product specifications may cause our customers to be reluctant to buy our products, which could harm our ability to retain existing customers and attract new customers and adversely impact our reputation. The process of identifying a defective or potentially defective product in systems that have been widely distributed may be lengthy and require significant resources. Further, if we are unable to determine the root cause of a problem or find an appropriate solution, we may delay shipment to customers. As a result, we may incur significant replacement costs and contract damage claims from our customers, and our reputation, business, financial condition, and results of operations may be adversely affected.

Though we are not currently aware of any occurrences, from time to time our products may be diverted from our supply chain or authorized distribution channels and sold on the “black market” or “gray market.” Customers purchasing our products on the black market or the gray market may use our products for purposes for which they were not intended, or may purchase counterfeit or substandard products, for instance that have been altered or damaged, which could result in damage to property or persons which could harm our business and cause our reputation to be adversely affected.

If we fail to accurately anticipate and respond to rapid technological change in the industries in which we operate, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

We operate in industries characterized by rapidly changing technologies as well as technological obsolescence. The introduction of new products by our competitors, the delay or cancellation of any of our customers’ product offerings for which our silicon timing systems solutions are designed, the market acceptance of products based on new or alternative technologies, or the emergence of new industry standards could render our existing or future products uncompetitive, obsolete, and otherwise unmarketable. Our failure to anticipate or timely develop new or enhanced products or technologies in response to changing market demand, whether due to technological shifts or otherwise, could result in the loss of customers and decreased revenue and have an adverse effect on our business, financial condition, and results of operations.

If our products do not conform to, or are not compatible with, existing or emerging industry standards, demand for our existing solutions may decrease, which in turn would harm our business and operating results.

We design certain of our products to conform to current industry standards. Some industry standards may not be widely adopted or implemented uniformly and competing standards may emerge that may be preferred by our distributors or our end customers.

Our ability to compete in the future will depend on our ability to identify and ensure compliance with evolving industry standards in our target markets, as well as in the timing IC industry. The emergence of new industry standards could render our products incompatible with products developed by third-party suppliers or make it difficult for our products to meet the requirements of certain OEMs. If our customers or our third-party suppliers adopt new or competing industry standards with which our solutions are not compatible, or if industry groups fail to adopt standards with which our solutions are compatible, our products would become less

25

desirable to our current or prospective customers. As a result, our sales would suffer, and we could be required to make significant expenditures to develop new products. Although we believe our products are compliant with applicable industry standards, proprietary enhancements may not in the future result in conformance with existing industry standards under all circumstances. If our products do not conform to, or are not compatible with, existing or emerging standards, it would harm our business, financial condition, and results of operations.

We may be unable to make the substantial investments that are required to remain competitive in our business.

The semiconductor industry requires substantial and continuous investment in research and development in order to bring to market new and enhanced solutions. We expect our research and development expenditures to increase in the future as part of our strategy to increase demand for our solutions in our current markets and to expand into additional markets. We are a smaller company with limited resources, and we may not have sufficient resources to maintain the level of investment in research and development required to remain competitive. In addition, we cannot assure you that the technologies, which are the focus of our research and development expenditures, will become commercially successful or generate any revenue.

If we fail to compete effectively, we may lose or fail to gain market share, which could negatively impact our operating results and our business.

The global semiconductor market in general, and the timing IC market in particular, is highly competitive. We expect competition to increase and intensify as additional companies enter our target markets, and as internal silicon design resources of large OEMs grow. Increased competition could result in price pressure, reduced gross margins and loss of market share, any of which could harm our business, financial condition, and results of operations. Our competitors range from large, international companies offering a wide range of semiconductor and quartz products to smaller companies, including start-ups, specializing in narrow market verticals. In the MEMS-based oscillator market, we primarily compete against Microchip Technology Inc. (“MCHP”) through their acquisition of Micrel, Incorporated. In the MEMS-based resonator market, we primarily compete against Murata Manufacturing Co., Ltd. In the analog mixed-signal IC and clocking market, we primarily compete against Renesas Electronics Corporation (through their acquisition of Integrated Device Technology, Inc.), Skyworks Solutions Inc., Texas Instruments Incorporated, Micrel (which is owned by MCHP), and Analog Devices, Inc. In the oscillator market, we primarily compete against quartz crystal suppliers such as Rakon Limited, Daishinku Corporation, Nihon Dempa Kogyo Co., Ltd., TXC Corporation, Seiko Epson Corporation, Kyocera Corporation, and Vectron International (which is owned by MCHP), as well as semiconductor suppliers such as Skyworks Solutions Inc. In the Aerospace-defense market for oscillators, we also typically complete against, small, specialized companies that offer quartz-based solutions for various applications. We expect competition in our current markets to increase in the future as existing competitors improve or expand their technology and product offerings and as new competitors enter these markets. In addition, our future growth will depend in part on our ability to successfully enter and compete in new markets. Some of these markets will likely be served by only a few large, multinational OEMs with substantial negotiating and buying power relative to us and, in some instances, with internally developed silicon solutions that can be competitive to our products.

Our ability to compete successfully depends, in part, on factors that are outside of our control, including industry and general economic trends. Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support, government support, and other resources, are more established than we are, and have significantly better brand recognition and broader product offerings. This in turn may enable them to better withstand adverse economic or market conditions, such as those caused by the COVID-19 pandemic, in the future and significantly reduce their pricing so as to compete against us. Our ability to compete successfully will depend on a number of factors, including:

•our ability to define, design, and regularly introduce new products that anticipate the functionality and integration needs of our customers’ next-generation products and applications;

•our ability to build strong and long-lasting relationships with our customers and other industry participants;

•our ability to capitalize on, and prevent losses due to, vertical integration by significant customers;

•our solutions’ performance and cost-effectiveness relative to those of competing products;

•our ability to achieve design wins;

•the effectiveness and success of our customers’ products utilizing our solutions within their competitive end markets;

•our research and development capabilities to provide innovative solutions and maintain our product roadmap;

•the strength of our sales and marketing efforts, including those of our distributors, and our brand awareness and reputation;

26

•our ability to secure capacity with our foundry and assembly partners to manufacture and assemble our products;

•our ability to deliver products in volume on a timely basis at competitive prices;

•our ability to withstand or respond to significant price competition;

•our ability to build and expand international operations in a cost-effective manner;

•our ability to obtain, maintain, protect, and enforce our intellectual property rights, including obtaining intellectual property rights from third-parties that may be necessary to meet the evolving demands of the market;

•our ability to defend potential patent infringement claims arising from third-parties;

•our ability to promote and support our customers’ incorporation of our solutions into their products; and

•our ability to retain high-level talent, including our management team and engineers.

Our competitors may also establish cooperative relationships among themselves or with third-parties or may acquire companies that provide similar products to ours. As a result, new competitors or alliances may emerge that could capture significant market share. Additionally, timing suppliers, especially resonator suppliers, may engage directly with our customers to help the customer build timing products, and eliminate the need for an external timing supplier in some of their applications. Any of these factors, alone or in combination with others, could harm our business, financial condition, and results of operations and result in a loss of market share and an increase in pricing pressure.

We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract or retain highly skilled employees could adversely affect our business.

Our success depends largely upon the continued services of our executive officers and other key employees, including our engineering and sales and marketing personnel. From time to time, there may be changes in our executive management team or other key personnel, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees could have an adverse effect on our business.

In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers with MEMS technology and advanced clock IC design expertise. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, it may adversely affect our ability to recruit and retain highly skilled employees. Further, changes in immigration policies may negatively impact our ability to attract and retain personnel, including personnel with specialized technical expertise. If we fail to attract new personnel or fail to retain or motivate our current personnel, our business and future growth prospects could be adversely affected.

Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.

We believe that our company culture, which promotes innovation, open communication, and teamwork, has been critical to our success. We face a number of challenges that may affect our ability to sustain our corporate culture, including:

•the potential failure to identify, attract, reward, and retain people in leadership positions in our organization who share and further our culture, values, and mission;

•the increasing size and geographic diversity of our workforce;

•competitive pressures to move in directions that may divert us from our mission, vision, and values;

•the continued challenges of a rapidly-evolving industry; and

•the increasing need to develop expertise in new areas of business that affect us.

If we are not able to maintain our culture, our business, financial condition, and results of operations could be adversely affected.

27

If the foundries with which we contract do not achieve satisfactory yields or quality, our reputation and customer relationships could be harmed.

We depend on satisfactory wafer foundry manufacturing capacity, wafer prices, and production yields, as well as timely wafer delivery to meet customer demand and enable us to maintain gross margins. The fabrication of our products is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields and, in some cases, cause production to be suspended. Our foundry vendors may experience manufacturing defects and reduced manufacturing yields from time to time. Further, any new foundry vendors we employ may present additional and unexpected manufacturing challenges that could require significant management time and focus. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by the foundries that we employ could result in lower than anticipated production yields or unacceptable performance of our devices. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time-consuming and expensive to correct. Poor production yields from the foundries that we employ, or defects, integration issues, or other performance problems in our solutions could significantly harm our customer relationships and financial results and give rise to financial or other damages to our customers. Any product liability claim brought against us, even if unsuccessful, would likely be time-consuming and costly to defend.

Manufacturing yields for new products initially tend to be lower as we complete product development and commence volume manufacturing, and typically increase as we bring the product to full production. Our business model includes this assumption of improving manufacturing yields and, as a result, material variances between projected and actual manufacturing yields will have a direct effect on our gross margin and profitability. The difficulty of accurately forecasting manufacturing yields and maintaining cost competitiveness through improving manufacturing yields will continue to be magnified by the increasing process complexity of manufacturing semiconductor products.

Raw material and engineered material availability and price fluctuations have in the past and may in the future increase the cost of our products, impact our ability to meet customer commitments, and may adversely affect our results of operations.

The cost of raw and engineered materials is a key element in the cost of our products. Our inability to offset material price inflation through increased prices to customers, suppliers, productivity actions, or through commodity hedges could adversely affect our results of operations. Many major components, product equipment items, engineered materials, and raw materials, are procured or subcontracted on a single or sole-source basis. Although we maintain a qualification and performance surveillance process and we believe that sources of supply for engineered materials, raw materials, and components are generally adequate, it is difficult to predict what effects shortages or price increases may have in the future. Our inability to fill our supply needs would jeopardize our ability to ship our solutions to our customers on time and in the quantity required, which could, in turn, result in reduced sales and profits, and damage to our customer relationships.

Furthermore, increases in the price of silicon wafers, testing costs, and commodities, which may result in increased production costs, mainly assembly and packaging costs, may result in a decrease in our gross margins. Moreover, our suppliers may pass the increase in engineered materials, raw materials and commodity costs onto us which would further reduce the gross margin of our products. In addition, as we are a fabless company, global market trends such as a shortage of capacity to fulfill our fabrication needs also may increase our raw material costs and thus decrease our gross margin.

We rely on our relationships with industry and technology leaders to enhance our product offerings and our inability to continue to develop or maintain such relationships in the future would harm our ability to remain competitive.

We develop many of our silicon timing systems products for applications in systems that are driven by industry and technology leaders in the communications and computing markets. We work with distributors, resellers, OEMs, and system manufacturers to define industry conventions and standards within our target markets. We believe that these relationships enhance our ability to achieve market acceptance and widespread adoption of our products. If we are unable to continue to develop or maintain these relationships, our silicon timing systems solutions could become less desirable to our customers, our sales could suffer and our competitive position could be harmed.

We are subject to the cyclical nature of the semiconductor industry.

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence, price erosion, evolving standards, short product life cycles, and wide fluctuations in product supply and demand. The industry experienced a significant downturn during past global recessions. These downturns have been characterized by diminished product demand, production overcapacity, high inventory levels, and accelerated erosion of average selling prices. Any downturns in the semiconductor industry could harm our business, financial condition, and results of operations. Furthermore, any significant upturn in the semiconductor industry could result in increased competition for access to third-party foundry and assembly capacity. We are

28

dependent on the availability of this capacity to manufacture and assemble our products and we can provide no assurance that adequate capacity will be available to us in the future.

Our ability to receive timely payments from, or the deterioration of the financial conditions of, our distributors or our end customers could adversely affect our operating results.

Our ability to receive timely payments from or the deterioration of the financial condition of, our distributors or our end customers could adversely impact our collection of accounts receivable, and, as a result, our revenue. We regularly review the collectability and creditworthiness of our customers to determine an appropriate allowance for credit losses. However, the extent of the COVID-19 pandemic’s impact on credit and financial markets is unknown, which creates uncertainty as to the financial condition of our distributors and customers. Based on our review of our customers annually and as of December 31, 2021, substantially all of which are large distributors, resellers, OEMs, and system manufacturers, we had $0.1 million and $0.1 million in allowance for credit losses as of December 31, 2021 and December 31, 2020, respectively. If our credit losses, however, were to exceed our current or future allowance for credit losses, our business, financial condition, and results of operations would be adversely affected.

We may not be able to accurately predict our future capital needs, and we may not be able to obtain additional financing to fund our operations.

We may need to raise additional funds in the future. Any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities or convertible debt, stockholders may experience significant dilution of their ownership interest, and the newly-issued securities may have rights senior to those of the holders of our common stock. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to incur additional interest expense. If additional financing is not available when required or is not available on acceptable terms, we may have to scale back our operations or limit our production activities, and we may not be able to expand our business, develop or enhance our solutions, take advantage of business opportunities, or respond to competitive pressures, which could negatively impact our revenue and the competitiveness of our products.

We may seek, or be required to seek, debt financing in the immediate or near term.

We may seek, or be required to seek, debt financing. Any required financing may not be available on terms acceptable to us, or at all. The terms of any financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to incur additional interest expense. If financing is not available when required or is not available on acceptable terms, it could harm our liquidity position and we may have to scale back our operations or limit our production activities, which in turn would harm our business, operating results, and financial condition.

If significant tariffs or other trade restrictions are placed on our products or third-party suppliers, our revenue and results of operations may be materially harmed.

Most of our revenue has been from sales of products to distributors with ship-to locations outside of the United States. Many of our third-party suppliers are located outside of the United States. If significant tariffs or other restrictions are placed on certain goods, existing tariffs are increased, or any related counter-measures are taken by other countries, our revenue and results of operations may be materially and adversely affected. For example, beginning in July 2018, the U.S. Trade Representative imposed tariffs on products from China. Then the prior U.S. administration imposed new or additional tariffs on Chinese products with short notice and China then imposed certain retaliatory tariffs. It is uncertain if the current U.S. administration may further alter trade agreements and terms between China and the United States, including limiting trade with China and imposing additional tariffs on imports from China. In the event that these or future tariffs are imposed on imports of our products or on our third-party suppliers, or that China or other countries take retaliatory trade measures in response to existing or future tariffs, our business may be impacted and we may be required to raise prices or make changes to our operations, any of which could materially harm our revenue or operating results.

Fluctuations in exchange rates between and among the currencies of the countries in which we do business could adversely affect our results of operations.

Our sales have been historically denominated in U.S. dollars. An increase in the value of the U.S. dollar relative to the currencies of the countries in which our customers operate could impair the ability of our customers to cost-effectively purchase or integrate our solutions into their product offerings, which may materially affect the demand for our solutions and cause these customers to reduce their orders, which in turn would adversely affect our revenue and business. If we increase operations in other currencies in the future, we may experience foreign exchange gains or losses due to the volatility of other currencies compared to the U.S. dollar. Certain of our employees are located in Malaysia, the Netherlands, Taiwan, Japan, France, and Ukraine, and we have engineering consultants in

29

Russia. Accordingly, a portion of our payroll as well as certain other operating expenses are paid in currencies other than the U.S. dollar. Our results of operations are denominated in U.S. dollars, and the difference in exchange rates in one period compared to another may directly impact period-to-period comparisons of our results of operations. Furthermore, currency exchange rates have been especially volatile in the recent past, and these currency fluctuations may make it difficult for us to predict our results of operations.

Failure to comply with the laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences.

We face significant risks if we fail to comply with anti-corruption laws and anti-bribery laws, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. Travel Act, and the UK Bribery Act 2010, that prohibit improper payments or offers of payment to foreign governments and political parties by us for the purpose of obtaining or retaining business. In many foreign countries, particularly in countries with developing economies, it may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other applicable laws and regulations. Any violation of these laws could result in severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracting, which could have an adverse effect on our reputation, business, financial condition, and results of operations.

We are subject to government regulation, including import, export and economic sanctions laws and regulations that may expose us to liability and increase our costs.

Our products and technology are subject to U.S. export controls, including the U.S. Department of Commerce’s Export Administration Regulations (“EAR”) and economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. These regulations may limit the export of our products and technology, and provision of our services outside of the United States, or may require export authorizations, including by license, a license exception, or other appropriate government authorizations and conditions, including annual or semi-annual reporting. Export control and economic sanctions laws may also include prohibitions on the sale or supply of certain of our products to embargoed or sanctioned countries, regions, governments, persons, and entities. For example, we sell to markets in Asia where multiple companies have been added to the Entity List, requiring license for exports of items subject to control under the EAR. To our knowledge, we have not sold products subject to the EAR to Entity List persons. In addition, various countries regulate the importation of certain products, through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products. The exportation, re-exportation, and importation of our products and technology and the provision of services, including by our partners, must comply with U.S. and other laws or else we may be adversely affected through reputational harm, government investigations, penalties, and a denial or curtailment of our ability to export our products and technology. Although we take precautions to prevent our products and technology from being provided in violation of such laws, our products and technology may have previously been, and could in the future be, provided inadvertently in violation of such laws, despite the precautions we take. Changes in export or import laws or sanctions policies also may adversely impact our operations, delay the introduction and sale of our products in international markets, or, in some cases, prevent the export or import of our products and technology to certain countries, regions, governments, persons, or entities altogether, which could adversely affect our business, financial condition, and results of operations.

Changes in environmental laws or regulations, including conflict minerals rules, could impair our ability to compete in international markets.

Our product or manufacturing standards could be impacted by new or revised environmental rules and regulations or other social initiatives. For example, the SEC adopted disclosure requirements in 2012 relating to the sourcing of certain minerals from the Democratic Republic of Congo and certain other adjoining countries. These rules, which required reporting starting in 2014, could adversely affect our costs, the availability of minerals used in our products, and our relationships with customers and suppliers. Also, since our supply chain is complex, we may face reputational challenges with our customers, stockholders, and other stakeholders if we are unable to sufficiently verify the origins for any conflict minerals used in the products that we sell.

New or future changes to U.S. and non-U.S. tax laws could materially adversely affect us.

New or future changes in tax laws, regulations, and treaties, or the interpretation thereof, in addition to tax regulations enacted but not in effect, tax policy initiatives and reforms under consideration in the United States or related to the Organization for Economic Co-operation and Development’s (“OECD”), Base Erosion and Profit Shifting Project (“BEPSP”), the European Commission’s state aid investigations, and other initiatives could have an adverse effect on the taxation of international businesses. Furthermore, countries where we are subject to taxes, including the United States, are independently evaluating their tax policy and we may see significant changes in legislation and regulations concerning taxation. Certain countries have already enacted legislation, including those related to BEPSP, which could affect international businesses, and other countries have become more aggressive in their approach to audits and enforcement of their applicable tax laws. In addition, we are unable to predict what future tax reform may be proposed or enacted

30

or what effect such changes would have on our business, but any changes, to the extent they are brought into tax legislation, regulations, policies, or practices, could increase our effective tax rates in the countries where we have operations and have an adverse effect on our overall tax rate, along with increasing the complexity, burden and cost of tax compliance, all of which could impact our business, financial condition, and results of operations.

Tax regulatory authorities may disagree with our positions and conclusions regarding certain tax positions resulting in unanticipated costs or non-realization of expected benefits.

A tax authority may disagree with tax positions that we have taken. For example, the Internal Revenue Service (“IRS”), or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property in connection with our intercompany research and development cost sharing arrangement and legal structure. A tax authority may take the position that material income tax liabilities, interest, and penalties are payable by us, in which case, we expect that we might contest such assessment. Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the assessment, the implications could be materially adverse to us and affect our anticipated effective tax rate or operating income, and we could be required to pay substantial penalties and interest where applicable.

Catastrophic events may disrupt our business.

Our corporate headquarters and some of our suppliers and foundry vendors are located in areas that are in active earthquake zones or are subject to power outages, natural disasters, political, social, or economic unrest, and other potentially catastrophic events. In the event of a major earthquake, hurricane, flooding, or other catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war, terrorist attack, political, social, or economic unrest, or disease outbreak, such as the current COVID-19 pandemic, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our product development, breaches of data security, or loss of critical data, any of which could have an adverse effect on our future results of operations.

State, federal, and foreign laws and regulations related to privacy, data use, and security could adversely affect us.

We are subject to state and federal laws and regulations related to privacy, data use, and security. In addition, in recent years, there has been a heightened legislative and regulatory focus on data security, including requiring consumer notification in the event of a data breach. Legislation has been introduced in Congress and there have been several Congressional hearings addressing these issues. From time to time, Congress has considered, and may do so again, legislation establishing requirements for data security and response to data breaches that, if implemented, could affect us by increasing our costs of doing business. In addition, several states have enacted privacy or security breach legislation requiring varying levels of consumer notification in the event of a security breach. For example, California passed the California Consumer Privacy Act (“CCPA”), which enhances consumer protection and privacy rights by granting consumers resident in California new rights with respect to the collection of their personal data and imposing new operational requirements on businesses, and went into effect in January 2020. The CCPA includes a statutory damages framework and private rights of action against businesses that fail to comply with certain CCPA terms or implement reasonable security procedures and practices to prevent data breaches. Additionally, in November 2020, California voters passed the California Privacy Rights Act of 2020 (“CPRA”). Effective in most material respects starting on January 1, 2023, the CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding the CCPA with additional data privacy compliance requirements that may impact our business. Several other states are considering similar legislation.

Foreign governments are raising similar privacy and data security concerns. In particular, the European Union has enacted a General Data Protection Regulation (“GDPR”), which became effective in May 2018. China, Russia, Japan, and other countries in Latin America and Asia are also strengthening their privacy laws and the enforcement of privacy and data security requirements. Complying with such laws and regulations may be time-consuming and require additional resources, and could therefore adversely affect our business, financial condition, and results of operations.

Breaches or other disruptions of our security systems may damage our reputation and adversely affect our business.

Our security systems are designed to protect our and our customers’, suppliers’, and employees’ confidential information, as well as maintain the physical security of our facilities. We continue to assess and improve the quality of our networks, endpoints, security systems, and policies and procedures related to cybersecurity risks and incidents. We are not aware of any past cybersecurity incidents that have materially impacted our business. We may not have current capability to detect new or unknown security vulnerabilities. Cybersecurity threats, which include computer viruses, spyware, malware, ransomware, attempts to access information, denial of service attacks, and other electronic security breaches, are persistent and evolve quickly. Such threats have recently increased in frequency, scope, magnitude, and cost. Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until after they are launched against a target, we may be unable to anticipate these techniques

31

or to implement adequate preventative measures. Accidental or willful security breaches or other unauthorized access by third parties to our information systems or facilities, or the existence of computer viruses in our data or software, could expose us to a risk of information loss, misappropriation of proprietary and confidential information, as well as work stoppages or disruptions.

We also rely on third-party cloud-based service providers of corporate infrastructure services relating to, among other things, human resources, electronic communication services, and finance functions, and we are, of necessity, dependent on the security systems of these providers. These technologies are subject to failure, including as a result of an inability to have such technologies properly supported, updated, expanded, or integrated into other technologies. These technologies may also contain open source and third-party software which may unbeknownst to us contain defects or viruses.

Any security breaches or other unauthorized access by third parties to the systems of our cloud-based service providers or the existence of computer viruses in their data or software could expose us to a risk of information loss and misappropriation of confidential information.

Any loss, theft, or misuse of this information could result in, among other things, unfavorable publicity, damage to our reputation, difficulty in marketing our products, allegations by our customers that we have not performed our contractual obligations, regulatory fines or penalties, litigation by affected parties, and possible financial obligations for liabilities and damages related to the theft or misuse of this information, any of which could have an adverse effect on our business, financial condition, results of operations, reputation, and relationships with our customers and suppliers.

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

As of December 31, 2021, we had U.S. federal and state net operating loss (“NOL”), carryforwards of approximately $259.6 million and $64.5 million, respectively, and U.S. federal and state research and development tax credit carryforwards of approximately $3.9 million and $3.6 million, respectively. The U.S. federal NOL carryforwards begin to expire in 2025 and the state NOL carryforwards begin to expire in 2028. The U.S. federal research and development tax credit carryforwards begin to expire in 2025 and the state research and development tax credit carryforwards carry forward indefinitely. These net operating loss and U.S. federal tax credit carryforwards could expire unused and/or be unavailable to offset future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of California state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We completed a Section 382 analysis and determined an ownership change occurred in 2014 and concluded that it had no impact on U.S. federal and California net operating losses or on U.S. federal research and development credits. Our initial public offering in November 2019 did not result in a change in ownership of greater than 50% under Section 382. We also had a follow-on offering on June 16, 2020, which resulted in greater than 50% change under Section 382. We completed an updated Section 382 analysis based on this new change event and determined that it will not prohibit us from eventually utilizing our carryforwards. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If we determine that an ownership change has occurred and our ability to use our historical net operating loss and tax credit carryforwards is materially limited, it would harm our future business, financial condition, and results of operations by effectively increasing our future tax obligations. In addition, under the Tax Act, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely but generally may not be carried back and the deductibility of such NOLs is limited to 80% of taxable income. Under the CARES Act, which was signed into law in 2020, an NOL from a tax year beginning in 2018, 2019 or 2020 can be carried back five years and would not be subject to the 80%-of-income limitation if they are exhausted during the five-year carryback period or during 2018, 2019 or 2020. The Company will not carry back any NOLs as they did not have taxable income in prior years.

Risks Related to Intellectual Property

Our failure to adequately protect our intellectual property rights could impair our ability to compete effectively or defend ourselves from litigation, which could harm our business, financial condition, and results of operations.

Our success depends, in part, on our ability to protect our intellectual property. We rely primarily on patent, copyright, trademark, and trade secret laws, as well as confidentiality and non-disclosure agreements, and other contractual protections, to protect our technologies and proprietary know-how, all of which offer only limited protection. The steps we have taken to protect our intellectual property rights may not be adequate to prevent the misappropriation, infringement, or other violation of our proprietary information or infringement of our intellectual property rights, and our ability to prevent such misappropriation, infringement, or other violation is uncertain, particularly in countries outside of the United States. As of December 31, 2021, we had 83 issued U.S. patents, expiring generally between 2026 and 2039 and 38 pending U.S. patent applications (including two provisional applications). We also had two foreign issued patents expiring in 2036 and four pending foreign patent applications. Our issued patents and pending patent

32

applications generally relate to our MEMS fabrication process, MEMS resonators, circuits, packaging, and oscillator systems. We cannot assure you that any patents from any pending patent applications (or from any future patent applications) will be issued, and even if the pending patent applications are granted, the scope of the rights granted to us may not be meaningful or provide us with any commercial advantage. For example, these patents could be opposed, contested, circumvented, designed around by third parties, be narrowed or declared invalid or unenforceable in judicial or administrative proceedings including re-examination, inter partes review, post-grant review, interference and derivation proceedings and equivalent proceedings in foreign jurisdictions, or be subject to ownership claims by third parties. The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies. Our foreign patent protection is less comprehensive than our U.S. patent protection and may not protect our intellectual property rights in some countries where our products are sold or may be sold in the future. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. Further, we are currently unable to take advantage of selling our products online in certain countries where we do not own trademarks for our corporate name. Many U.S.-based companies have encountered substantial third-party intellectual property infringement in foreign countries, including countries where we sell products. If such an impermissible use of our intellectual property or trade secrets were to occur, our ability to sell our solutions at competitive prices may be adversely affected and our business, financial condition, and results of operations could be adversely affected.

The legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain and evolving. We cannot assure you that others will not develop or patent similar or superior technologies or solutions, or that our patents, trademarks, and other intellectual property will not be challenged, invalidated, or circumvented by others.

We also have a license to certain patents from Bosch relating to the design and manufacture of MEMS-based timing applications. The patent rights obtained under the license agreement expire between 2021 and 2029, and the license agreement expires upon expiration of the last patent licensed under the agreement. We do not believe there will be any significant impact upon expiration of these patents.

We believe that the success of our business depends more on proprietary technology, information and processes, and know-how than on our patents or trademarks. Much of our proprietary information and technology related to manufacturing processes is not patented and may not be patentable.

Unauthorized copying or other misappropriation of our proprietary technologies could enable third parties to benefit from our technologies without paying us for doing so, which could harm our business. Monitoring unauthorized use of our intellectual property is difficult and costly. It is possible that unauthorized use of our intellectual property may have occurred or may occur without our knowledge. We cannot assure you that the steps we have taken will prevent unauthorized use of our intellectual property, or that others will not develop technologies similar or superior to our technology or design around our intellectual property. Our failure to effectively protect our intellectual property could reduce the value of our technology in licensing arrangements or in cross-licensing negotiations.

In addition, we also rely on contractual protections with our customers, suppliers, distributors, employees, and consultants, and we implement security measures designed to protect our trade secrets and know-how. However, we cannot assure you that we have entered into such agreements with every such party, that these contractual protections and security measures will not be breached, that we will have adequate remedies for any such breach, or that our customers, suppliers, distributors, employees, or consultants will not assert rights to intellectual property or damages arising out of such contracts.

We may in the future need to initiate infringement claims or litigation in order to try to protect or enforce our intellectual property rights. Litigation, whether we are a plaintiff or a defendant, can be expensive and time-consuming and may divert the efforts of our management and other personnel, which could harm our business, whether or not such litigation results in a determination favorable to us. Litigation also puts our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Additionally, any enforcement of our patents or other intellectual property may provoke third parties to assert counterclaims against us. If we are unable to meaningfully protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, financial condition, results of operations, reputation, and competitive position could be harmed.

We may face intellectual property infringement, misappropriation, or other claims, which could be time-consuming and costly to defend or settle and which could result in the loss of significant rights and harm our relationships with our customers and distributors.

The semiconductor industry in which we operate is characterized by companies that hold patents and other intellectual property rights and vigorously pursue, protect, and enforce intellectual property rights. From time to time, third parties may assert against us and our customers and distributors their patent and other intellectual property rights to technologies that are important to our business. For example, in March 2019, VTT Technical Research Centre of Finland, Ltd. filed suit in the United States District Court for the Northern District of California alleging infringement by us of a patent. The District Court ruled in our favor, VTT filed an appeal with

33

the U.S. Court of Appeals for the Federal Circuit (“CAFC”), on June 9, 2021, a hearing was held at the CAFC, and on June 10, 2021 the CAFC affirmed the District Court’s judgment. Any litigation, regardless of success or merit, could cause us to incur substantial expenses, reduce our sales, and divert the efforts of our management and other personnel. In the event we receive an adverse result in any litigation, we could be required to pay substantial damages, seek licenses from third parties, which may not be available on reasonable terms or at all, cease sale of products, expend significant resources to develop alternative technology, or discontinue the use of processes requiring the relevant technology. For more information regarding this matter, see Note 6 in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report.

In addition, our commercial success depends upon our ability to manufacture and sell our products without infringing, misappropriating, or otherwise violating the intellectual property rights of others. Claims that our products, processes, or technology infringe, misappropriate, or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be costly to defend or settle and could divert the efforts and attention of our management and other personnel. We may in the future, particularly as a public company with an increased profile and visibility, receive communications from others alleging our infringement, misappropriation, or other violation of patents, trade secrets, or other intellectual property rights. We cannot assure you that, if made, these claims will not be successful, and lawsuits resulting from such allegations, even if we believe they are invalid, could subject us to significant liability for damages, invalidate our proprietary rights, and prevent us from selling specific products. Moreover, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Intellectual property claims could also harm our relationships with our customers or distributors and might deter future customers from doing business with us. We do not know whether we will prevail in any such proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. If any future proceedings result in an adverse outcome, we could be required to:

•cease the manufacture, use or sale of the applicable products, processes, or technology;

•pay substantial damages for infringement by us or our customers;

•expend significant resources to develop non-infringing products, processes, or technology, which may not be successful;

•license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;

•cross-license our technology to a competitor to resolve an infringement claim, which could weaken our ability to compete with that competitor;

•lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property rights against others; or

•pay substantial damages to our customers or end users to discontinue their use of or to replace infringing technology sold to them with non-infringing technology, if available.

Any of the foregoing results could adversely affect our business, financial condition, and results of operations.

Any potential dispute involving patents or other intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

In any potential dispute involving patents or other intellectual property, our customers could also become the target of litigation. Our agreements with customers and other third-parties generally include indemnification or other provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our solutions included in their products. Large indemnity payments or damage claims from contractual breach could harm our business, financial condition, and results of operations. From time to time, customers may require us to indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures with respect to their intellectual property and trade secrets. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them. Any litigation against our customers could trigger technical support and indemnification obligations under some of our agreements, which could result in substantial expense to us.

In addition, other customers, or end customers with whom we do not have formal agreements requiring us to indemnify them may ask us to indemnify them if a claim is made as a condition to awarding future design wins to us. Because some of our customers are larger than we are and have greater resources than we do, they may be more likely to be the target of an infringement claim by third parties

34

than we would be, which could increase our chances of becoming involved in a future lawsuit. If any such claims were to succeed, we might be forced to pay damages on behalf of our customers that could increase our expenses, disrupt our ability to sell our solutions and reduce our revenue and profit. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other current and prospective customers and reduce demand for our solutions. In addition to the time and expense required for us to supply support or indemnification to our customers, any such litigation could severely disrupt or shut down the business of our customers, which in turn could hurt our relations with our customers and cause the sale of our products to decrease. Any of the foregoing could harm our business, financial condition, and results of operations.

Risks Related to MegaChips Corporation’s Ownership Position in Our Common Stock

As long as MegaChips holds a significant amount of our stock, our other shareholders’ ability to influence matters requiring stockholder approval will be limited.

MegaChips owns 5,000,000 shares of our common stock, representing approximately 24% of our outstanding common stock as of December 31, 2021. For so long as MegaChips or its successors in interest continue to hold the largest ownership position in our outstanding common stock, we expect MegaChips to continue to hold at least one out of eight seats on our board of directors, and to be influential in electing members of our board of directors. As long as MegaChips continues to be our largest stockholder, it will continue to have significant influence over us.

For example, as long as MegaChips continues to hold a significant or the largest ownership position in our outstanding common stock, MegaChips may have the ability to affect the outcome of any stockholder vote during this period. As a result, MegaChips will have the ability to exert significant influence over many matters affecting us, either through its board representative or as a stockholder, including:

•determinations with respect to our business plans and policies, including the appointment and removal of our officers;

•any determinations with respect to mergers and other business combinations;

•our acquisition or disposition of assets;

•our financing activities;

•the allocation of business opportunities that may be suitable for us and MegaChips;

•the payment of dividends on our common stock; and

•the number of shares available for issuance under our stock plans.

MegaChips’ voting control may discourage transactions involving a change of control of us, including transactions in which other holders of our common stock might otherwise receive a premium for their shares over the then current market price. In addition, as a result of this voting control and representations on our board of directors, persons who we would like to invite to join our board of directors may decline to do so.

Our inability to resolve any disputes that arise between us and MegaChips with respect to our past and ongoing relationships may adversely affect our operating results.

Disputes may arise between MegaChips and us in a number of areas relating to our past and ongoing relationships, including:

•labor, tax, employee benefit, indemnification, and other matters arising from our separation from MegaChips;

•employee retention and recruiting;

•sales or distributions by MegaChips of our products under our distribution agreement with MegaChips;

•sales or distributions by MegaChips of all or any portion of its ownership interest in us;

•the nature, quality, and pricing of services MegaChips has agreed to provide us; and

•business opportunities that may be attractive to both MegaChips and us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

We have entered into an integration and purchase agreement with MegaChips for the sale of resonators by us to MegaChips. The agreements we entered into with MegaChips may be amended upon agreement between the parties. Because MegaChips is a major

35

stockholder with representatives on our board of directors, we may not have the leverage to negotiate amendments to these agreements on terms as favorable to us compared to those we would negotiate with an unaffiliated third party.

There could be potential conflicts of interest between us and affiliates of MegaChips, which could impact our business and operating results.

Some of our directors have or had affiliations with MegaChips. Affiliations of directors with MegaChips could create, or appear to create, conflicts of interest with respect to matters involving both us and MegaChips. For example, corporate opportunities may arise that concern both of our businesses, such as the potential acquisition of a particular business or technology that is complementary to both of our businesses. Our Board has adopted a Related Persons Transactions Policy to address actual or perceived conflicts of interest of directors, officers and greater than 5% stockholders on a case-by-case basis. If any corporate opportunity arises and if our directors and officers do not pursue it on our behalf, we may not become aware of, and may potentially lose, a significant business opportunity.

Risks Related to Our Common Stock

Substantial future sales of our common stock could cause the market price of our common stock to decline.

The market price of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our directors, executive officers, and significant stockholders, including MegaChips, or the perception in the market that holders of a large number of shares intend to sell their shares.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and bylaws include provisions that:

•authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;

•require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

•specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, or our Chief Executive Officer;

•establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

•establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;

•prohibit cumulative voting in the election of directors;

•provide that our directors may be removed only for cause;

•provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and

•require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder. Any delay or prevention of a change of control transaction or changes in our management could cause our stock price to decline.

Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and federal district courts will be the sole and exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what they believe to be a favorable judicial forum for disputes with us or our directors, officers, or other employees.

36

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (d) any action asserting a claim against us governed by the internal affairs doctrine. Section 27 of the Securities Exchange Act of 1934, or the Exchange Act, creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our bylaws further provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in our capital stock shall be deemed to have notice of and consented to the provisions of our bylaws described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, or other employees. Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors.

We may make acquisitions in the future that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, and harm our business.

In the future, we may acquire other businesses, products, or technologies. Our ability to make acquisitions and successfully integrate personnel, technologies, or operations of any acquired business is unproven. If we complete acquisitions, we may not achieve the combined revenue, cost synergies, or other benefits from the acquisition that we anticipate, strengthen our competitive position, or achieve our other goals in a timely manner, or at all, and these acquisitions may be viewed negatively by our customers, financial markets, or investors. In addition, any acquisitions we make may create difficulties in integrating personnel, technologies, and operations from the acquired businesses and in retaining and motivating key personnel. Acquisitions may disrupt our ongoing operations, divert management from their primary responsibilities, subject us to additional liabilities, increase our expenses, and adversely impact our business, financial condition, and results of operations. Acquisitions may also reduce our cash available for operations and other uses, and could result in an increase in amortization expense related to identifiable assets acquired, potentially dilutive issuances of equity securities, or the incurrence of debt, any of which could harm our business, financial condition, and results of operations.

Our stock price may be volatile and may decline, resulting in a loss of some or all of our stockholder investment.

The trading price and volume of our common stock is likely to be volatile and could fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

•actual or anticipated fluctuations in our results of operations due to, among other things, changes in customer demand, product life cycles, pricing, ordering patterns, and unforeseen operating costs;

•the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

•announcements with respect to developments, status, and impact on us, our competition, our constituents, and our suppliers of the COVID 19 global pandemic;

•failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates or ratings by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors;

•announcements by our significant customers of changes to their product offerings, business plans, or strategies;

•announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

•changes in operating performance and stock market valuations of other technology companies generally, or those in the semiconductor industry;

•timing and seasonality of the end-market demand;

37

•cyclical fluctuations in the semiconductor market;

•price and volume fluctuations in the overall stock market from time to time, including as a result of trends in the economy as a whole;

•actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;

•new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

•any major change in our management;

•lawsuits threatened or filed against us; and

•other events or factors, including those resulting from war, incidents of terrorism, the COVID-19 pandemic, or responses to these events.

In addition, the market for technology stocks and the stock markets in general have experienced extreme price and volume fluctuations. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, financial condition, and results of operations.

We are a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.

We are a smaller reporting company, and will cease to be able to report as a smaller reporting company commencing with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. As a result, we will be able to take advantage of the reduced disclosure obligations regarding executive compensation in our 2022 proxy statement. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile.

Item 1B. Unresolved Staff Comments.

None

Item 2. Properties.

Our principal executive offices are located in a leased facility in Santa Clara, California, consisting of approximately 50,400 square feet of office space under lease that expires in March 2027. This facility accommodates our principal engineering, sales, marketing, operations, finance, and administrative activities. We also lease offices in Michigan, Japan, Malaysia, the Netherlands, Taiwan and Ukraine. We do not own any real property. We believe that our leased facilities are adequate to meet our current needs and that additional facilities will be available on commercially reasonable terms for lease to meet future needs.

Item 3. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition, and results of operations.

Item 4. Mine Safety Disclosures.

Not applicable

38

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information for Common Stock

Our common stock has been quoted on the Nasdaq Global Market under the symbol “SITM” since our initial public offering in November 2019. Prior to that time, there was no public market for our common stock.

As of February 17, 2022, there were 17 holders of record (not including beneficial holders of stock held in street names) of our common stock.

Dividend Policy

We have never paid any cash dividends on our common stock. Our board of directors currently intends to retain any future earnings to support operations and to finance the growth and development of our business and does not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board.

Stock Performance Graph

The following information shall not be deemed to be soliciting material or to be filed with the SEC, or subject to Regulations 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

The following line graph compares for the period beginning November 21, 2019, the initial trading date of our common stock on the Nasdaq Global Market, and ending on December 31, 2021, the last day of our fiscal year, the cumulative total stockholder return for our common stock, the Nasdaq Composite Index and Philadelphia Semiconductor Index and assumes reinvestment of any

39

dividends. The stockholder return shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock, and we do not make or endorse any predictions as to future stockholder returns.

 

	Base
	Period		December 31,		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,		December 31,
Company Name/Index	11/21/2019		2019		2020		2020		2020		2020		2021		2021		2021		2021
SiTime Corporation		100.00		150.89		128.82		280.53		497.22		662.31		583.43		749.05		1,208.11		1,731.01
Nasdaq composite index		100.00		105.22		90.29		117.95		130.95		151.13		155.34		170.08		169.43		183.46
Philadelphia    Semiconductor    index		100.00		109.24		89.22		117.91		132.54		165.10		184.56		197.58		192.43		233.06

40

Item 6. [Reserved]

41

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. The MD&A contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that involve risks and uncertainties, which are discussed under Item 1A.

Overview

We are a leading provider of silicon timing solutions. Our timing solutions are the heartbeat of our customers’ electronic systems. They solve complex timing problems and enable industry-leading products. We provide solutions that are differentiated by high performance and reliability, programmability, small size, and low power consumption. Our products have been designed into over 250 applications across our target markets, including communications and enterprise, automotive, industrial, aerospace, mobile, IoT and consumer.

In 2021, we advanced our technology, expanded our product portfolio, increased our worldwide workforce, and generated a significant increase in revenue and profit. We saw continued strong revenue growth, increased gross margins, increased operating margins, increased net income and positive cash flow. Revenue grew 88% from $116.2 million in 2020 to $218.8 million in 2021. Gross margins increased by 14% from 50% in 2020 to 64% in 2021, while operating margins expanded from a 7% loss in 2020 to a 15% income in 2021. In addition, we raised $460.6 million during the year from our two stock offerings.

We commenced commercial shipments of our first oscillator products in 2006. Substantially all of our revenue to date has been derived from sales of oscillator systems across our target end markets. We intend to focus on clock IC and timing sync solutions in the future. We seek to aggressively expand our presence in these two markets.

We sell our products primarily through distributors and resellers, who in turn sell to our end customers. We also sell products directly to end customers who integrate our products into their applications. Based on sell-through information provided by our distributors, we believe the majority of our end customers are based in the U.S.

We operate a fabless business model, allowing us to focus on the design, sales, and marketing of our products, quickly scale production, and significantly reduce our capital expenditures. We leverage our global network of distributors and resellers to address the broad set of end markets we serve. For our largest accounts, dedicated sales personnel work with the end customer to ensure that our solutions fully address the end customer’s timing needs. Our smaller customers work directly with our distributors to select the optimum timing solution for their needs.

We were acquired by MegaChips in 2014 and were a wholly-owned subsidiary of MegaChips, a fabless semiconductor company based in Japan and traded on the Tokyo Stock Exchange, until November 25, 2019. On November 25, 2019, we completed the initial public offering of shares of our common stock. On June 16, 2020, we completed a follow-on public offering, in which we issued and sold 1,525,000 shares of our common stock and MegaChips sold 2,500,000 shares of our common stock held by it. On February 22, 2021, we completed an additional follow-on public offering, in which we issued and sold 1,500,000 shares of our common stock and MegaChips sold 1,500,000 shares of our common stock held by it. On November 10, 2021 we completed a follow-on public offering, in which we issued and sold 1,300,000 shares of our common stock and MegaChips sold 1,000,000 shares of our common stock held by it. MegaChips continues to be our largest stockholder and held approximately 24.0% of our common stock as of December 31, 2021.

We are currently experiencing a growth in demand for some of our products, however, there are a number of industry-wide supply constraints affecting the supply of analog circuits manufactured by certain foundries, including Taiwan Semiconductor Manufacturing Company, and affecting outsourced semiconductor assembly and test providers, which may limit our ability to fully satisfy the increase in demand. If we cannot ship our products to our customers on time and in the quantity required as a result of this supply constraint our sales could decline or could grow at a lower rate and we could lose customers. We believe that the effects of the industry-wide supply constraints on other timing device suppliers have contributed in part to our revenue and gross margin growth in 2021; however, we may not be able to sustain these revenue and gross margin increases in the future. It is not clear how long the industry-wide supply constraints will continue, or what the resulting impact will be on our gross margin and revenue when the industry-wide supply constraints resolve. For additional discussion please see Part I, Item 1A Risk Factors of this report, especially the risk factor titled “Our revenue and operating results may fluctuate from period to period, which could cause our stock price to fluctuate."

Impact of COVID-19 on our Business

42

The future impact of the ongoing COVID-19 pandemic on our business remains unknown. In an effort to protect the health and safety of our employees, we implemented safety measures at our locations around the world, including requiring employees to work from home (“WFH”) in certain locations at times, reducing the number of people in certain of our sites at any one time, and limiting employee travel. In an effort to contain the COVID-19 pandemic or slow its spread, governments around the world have also enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents in their homes or places of residence, and practice social distancing. In addition, the United States and other countries in which we operate have from time to time imposed measures such as quarantines and “shelter-in-place” orders that restrict business operations and travel and require individuals to WFH, which has impacted all aspects of our business, as well as those of the third-parties we rely upon for our manufacturing, assembly, testing, shipping and other operations. The current and future spread of COVID-19 variants may cause the reinstatement of one or more of these measures.

We anticipate the COVID-19 pandemic will continue to impact business activity across the globe and will continue to impact our business, employees and operations for the foreseeable future. We believe that as a result of the COVID-19 pandemic we have experienced some delay and disruption in the manufacture, shipment, and sales of our products. In addition, we believe the production capabilities of our suppliers has been, and will likely continue to be, impacted as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or WFH orders. These restrictions could limit our suppliers’ ability to operate their manufacturing facilities in that country. Any delay or disruption in the manufacture, shipment and sales of, or overall demand for, our products in turn may negatively and materially impact our operating and financial results, including revenue, gross margins, operating margins, cash flows and other operating results. Further, the resumption of normal business operations after such disruptions may be delayed and a resurgence of COVID-19 could result in continued disruption to us, our suppliers, and/or our customers. To date, we have experienced minimal impact from any supplier disruption resulting from COVID-19.

The duration and full magnitude of the COVID-19 pandemic’s impact on credit and financial markets is also unknown, which creates uncertainty as to the financial condition of our distributors or customers. In addition, the deterioration in credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures. We may also experience losses on our holdings of cash and investments due to failures of financial institutions and other parties.

We currently have employees, third-party contractors, distributors, and customers in numerous countries throughout the world that have been impacted by the COVID-19 pandemic. The COVID-19 pandemic has restricted and is expected to continue to restrict travel and use of our facilities and the facilities of our suppliers, customers, or other vendors in our supply chain, which could impact our business, interactions and relationships with our customers, third-party suppliers and contractors, and results of operations. We cannot predict with certainty what other impacts the COVID-19 pandemic may have on our business, employees, service providers, customers and results of operations.

There remains a high degree of uncertainty in the global business environment given the impact of the COVID-19 pandemic which creates challenges with visibility beyond the near term. Further, as WFH orders terminate and individuals return to work in offices, we may experience a reduction in demand for certain of our products that are incorporated in our customers’ products that experienced higher demand as a result of the increase in WFH during the COVID-19 pandemic. We will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees, operations, and prospects, or on our financial results for 2022 and beyond. For additional discussion, please see Part I, Item 1A Risk Factors of this report.

Key Factors Affecting Our Performance

Customer Orders and Forecasts

Because our sales are made pursuant to standard purchase orders, orders may be cancelled, reduced, or rescheduled with little or no notice and without penalty. Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers exposes us to the risks of inventory shortages or excess inventory. We may not be able to fulfill increased demand, at least in the short term, as we do not intend to acquire excess inventory to pre-build custom products.

43

Design Wins with New and Existing Customers

Our solutions enable our customers to differentiate their product offerings and position themselves to gain market share. We work closely with our customers to understand their product roadmaps and strategies. Our end customers continuously develop new products in existing and new application areas. We also consider design wins critical to our future success and anticipate being increasingly dependent on revenue from new design wins for our new higher-end products with higher average selling prices (“ASPs”). The selection process is typically lengthy and may require us to incur significant design and development expenditures in pursuit of a design win with no assurance that our solutions will be selected. As a result, the loss of any key design win or any significant delay in the ramp of volume production of the customer’s products into which our product is designed could adversely affect our business.

Customer Demand and Product Life Cycles

Once customers design our silicon timing systems solutions into their products, we closely monitor all aspects of their demand cycle, including the initial design phase, prototype production, volume production, and inventories, as well as end-market demand, including seasonality, cyclicality, and the competitive landscape. Given our customer relationships and the long-term aspects of our solutions, we benefit from visibility into customer demand. This in turn provides an opportunity for us to monitor and refine our business fundamentals.

Product Adoption within New Markets and Applications

As we evaluate new market opportunities and bring new products to market, we pay particular attention to forecasts by industry analysts and the adoption curve of technology. We also analyze in detail potential competing forces that could hinder such adoption. If we fail to anticipate or respond to technological shifts or market demands, or to timely develop new or enhanced products or technologies in response to the same, it could result in decreased revenue and the loss of our design wins to our competitors.

Pricing, Product Cost, and Product Mix

The ASPs of our products vary significantly. While the ASP of any individual product generally decreases over time, our average ASPs have historically remained relatively flat as we continue to introduce new higher-end products with higher ASPs. Our pricing and margins depend on customer demand as well as the volumes and the features of the timing devices we provide to our customers. We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers as we target new design win opportunities and manage the product life cycles of our existing customer designs. Since we rely on third-party wafer foundries and assembly and test contractors to manufacture, assemble, and test our products, we maintain a close relationship with our suppliers to improve quality and increase yields.

Gross margin, or gross profit as a percentage of revenue, has been, and will continue to be, affected by a variety of factors, including ASPs, and product mix in a given period, material costs, yields, inventory write-downs and manufacturing operations costs. We believe the primary driver of gross margin is the ASPs negotiated between us and our customers relative to material costs and yield improvement. As our products mature and unit volumes increase, we expect their ASPs to decline. These declines often coincide with improvements in manufacturing yields and lower wafer, assembly, and testing costs, which offset some or all of the margin reduction that results from lower ASPs. However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to new product introductions, existing product transitions into high-volume manufacturing, manufacturing costs, and our product mix.

Cyclical Nature of the Semiconductor Industry

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence, price erosion, evolving standards, short product life cycles, and wide fluctuations in product supply and demand. Downturns in the semiconductor industry have been characterized by diminished product demand, production overcapacity, high inventory levels, and accelerated erosion of average selling prices. Any prolonged or significant downturn in the semiconductor industry generally could adversely affect our business and reduce demand for our products and otherwise harm our business, financial condition and results of operations. Furthermore, any significant upturn in the semiconductor industry could result in increased competition for access to third-party foundry and assembly capacity. We are dependent on the availability of this capacity to manufacture and assemble our products and we can provide no assurance that adequate capacity will be available to us in the future.

44

Results of Operations

The following table summarizes our results of operations for the periods presented.

	Year Ended December 31,									Change 2021 vs 2020
	2021			2020			2019			$			%
	(in thousands, except percentage)
Revenue	$	218,808		$	116,156		$	84,074		$	102,652			88	%
Cost of revenue		79,346			58,224			44,516			21,122			36	%
Gross profit		139,462			57,932			39,558			81,530			141	%
Operating expenses:
Research and development		52,104			31,652			23,795			20,452			65	%
Selling, general and administrative		54,515			34,893			20,636			19,622			56	%
Total operating expenses		106,619			66,545			44,431			40,074			60	%
Income (loss) from operations		32,843			(8,613	)		(4,873	)		41,456			(481	%)
Interest expense		—			(726	)		(1,714	)		726			(100	%)
Other expense, net		(488	)		(32	)		(28	)		(456	)		1425	%
Income (loss) before income taxes		32,355			(9,371	)		(6,615	)		41,726			(445	%)
Income tax (expense) benefit		(78	)		(1	)		8			(77	)		7700	%
Net income (loss) attributable to common    stockholders and comprehensive income (loss)	$	32,277		$	(9,372	)	$	(6,607	)	$	41,649			(444	%)

A discussion of changes in our results of operations from fiscal 2019 to fiscal 2020 has been omitted from this Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for fiscal 2020 filed with the Securities and Exchange Commission on February 16, 2021.

Revenue

We derive revenue primarily from sales of silicon timing products to distributors and resellers who in turn sell to our end customers. We also sell products directly to end customers who integrate our products into their applications. Our sales are made pursuant to standard purchase orders which may be cancelled, reduced, or rescheduled, with little or no notice. We recognize product revenue upon shipment when we satisfy our performance obligations as evidenced by the transfer of control of our products to customers. We measure revenue based on the amount of consideration we expect to be entitled to in exchange for products.

	Year Ended December 31,						Change 2021 vs 2020
	2021		2020		2019		$		%
	(in thousands except percentage)
Revenue	$	218,808	$	116,156	$	84,074	$	102,652		88	%

Revenue increased by $102.7 million, or 88%, for 2021 compared to 2020. The increase was primarily related to 34% higher volume of shipments year over year and a 40% increase in average selling price ("ASP") of our products. The increase in sales volume was driven by higher demand for our products from new and existing customers, including new design wins at our existing customers. The ASP increase was related to change in mix of the products we shipped and increase in selling prices for certain products.

45

Cost of Revenue, Gross Profit, and Gross Margin

Cost of revenue consists of wafers acquired from third-party foundries, assembly, packaging, and test cost of our products paid to third-party contract manufacturers, and personnel and other costs associated with our manufacturing operations. Cost of revenue also includes depreciation of production equipment, inventory write-downs, amortization of internally developed software, shipping and handling costs, and allocation of overhead and facility costs. We also include credits for rebates received from foundries to cost of revenue.

	Year Ended December 31,									Change 2021 vs 2020
	2021			2020			2019			$		%
	(in thousands except percentage)
Cost of Revenue	$	79,346		$	58,224		$	44,516		$	21,122		36	%
Gross Profit		139,462			57,932			39,558			81,530		141	%
Gross Margin		64	%		50	%		47	%

Gross profit increased by $81.5 million in the year ended December 31, 2021 compared to the same period in 2020. Gross profit increased $86.6 million mainly from higher sales volume and an increase in ASPs of our products. This increase was offset by higher other manufacturing and overhead costs of $5.1 million of which $1.0 million was related to higher stock-based compensation expense.

Gross margin was higher by 14% in the year ended December 31, 2021 compared to the same period in 2020. The gross margin increased by 11% from higher sales volume and an increase in ASPs. There was additional 3% improvement in our other manufacturing costs as it decreased as a percentage of revenue.

We expect to see increases in our manufacturing costs in fiscal year 2022 due to an industry wide increase in costs. Gross margin may fluctuate from time to time due to a variety of factors.

Operating Expenses

Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and commissions. Our operating expenses also include consulting costs, allocated costs of facilities, information technology, and depreciation.

	Year Ended December 31,						Change 2021 vs 2020
	2021		2020		2019		$		%
	(in thousands except percentage)
Operating Expenses:
Research and development	$	52,104	$	31,652	$	23,795	$	20,452		65	%
Selling, general and administrative		54,515		34,893		20,636		19,622		56	%
Total operating expenses	$	106,619	$	66,545	$	44,431	$	40,074		60	%

Research and Development

Our research and development efforts are focused on the design and development of next-generation silicon timing systems solutions. Our research and development expense consists primarily of personnel costs, which include stock-based compensation, pre-production engineering mask costs, software license and intellectual property expenses, design tools and prototype-related expenses, facility costs, supplies, professional and consulting fees, and allocated overhead costs, offset by non-recurring engineering service credits. We expense research and development costs as incurred. We believe that continued investment in our products and services is important for our future growth and acquisition of new customers and, as a result, we expect our research and development expenses to continue to increase in absolute dollars. However, we expect our research and development expense to fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Research and development expense increased by $20.5 million, or 65%, for the year ended December 31, 2021 compared to the same period in 2020, primarily due to higher personnel costs of $10.0 million due to increased headcount, an increase in stock-based compensation expense of $6.1 million, and higher ongoing new product related expenses of $6.9 million primarily consisting of consulting and supplies. These were offset by non-recurring engineering contra-expense recognized of $2.4 million.

46

Sales, General and Administrative

Sales, general and administrative expense consists of personnel costs, including stock-based compensation, professional and consulting fees, accounting and audit fees, legal costs, field application engineering support, travel costs, advertising expenses, and allocated overhead costs. We expect sales, general and administrative expense to continue to increase in absolute dollars as we increase our personnel and grow our operations, although it may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Selling, general and administrative expense increased by $19.6 million, or 56%, for the year ended December 31, 2021 compared to the same period in 2020, primarily due to higher stock-based compensation expense of $6.2 million, higher personnel costs of $4.2 million, higher commission expenses of $4.5 million due to increased revenue, and higher consulting fees of $3.4 million.

Other Expense

Other expense consists primarily of interest expense on our outstanding debt, interest income on our cash balances, and foreign exchange gains and losses. See Note 7 to our consolidated financial statements under Item 8 for more information about our debt.

	Year Ended December 31,									Change 2021 vs 2020
	2021			2020			2019			$			%
	(in thousands except percentage)
Interest Expense	$	-		$	(726	)	$	(1,714	)	$	726			(100	%)
Other expense, net		(488	)		(32	)		(28	)		(456	)		1425	%
Total other expense	$	(488	)	$	(758	)	$	(1,742	)	$	270			(36	%)

Other expense decreased $0.3 million for the year ended December 31, 2021 compared to the same period in 2020, primarily as a result of no interest expense in 2021 on our outstanding revolving short-term debt as we paid in full all of our debt on July 24, 2020, offset by a net unrealized loss on foreign exchange rates due to increased activities in our foreign subsidiaries.

Income Tax Benefit (Expense)

Income tax expense consists primarily of state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We have a full valuation allowance for deferred tax assets as the realization of the full amount of our deferred tax asset is uncertain, including net operation losses (NOL), carryforwards, and tax credits related primarily to research and development. We expect to maintain this full valuation allowance until realization of the deferred tax assets becomes more likely than not. At December 31, 2021 and 2020, we had federal NOL carry-forwards of approximately $259.6 million and $201.5 million, respectively, and state NOL carry-forwards of approximately $64.5 million and $64.0 million, respectively. We had research and development tax credit carryforwards of approximately $3.9 million and $3.9 million, respectively for U.S. federal income tax purposes and $3.6 million and $3.6 million, respectively for state income tax purposes. Of the federal NOL carryforwards, approximately $148.4 million will expire in various years through 2036, if not utilized, and approximately $111.2 million will carry forward indefinitely. NOL carryforwards for state income tax purposes, if not utilized, will expire in various years through 2040. The research and development credit carryforwards for federal tax purposes will expire in various years through 2038, and state tax credits carry forward indefinitely.

	Year Ended December 31,								Change 2021 vs 2020
	2021			2020			2019		$			%
	(in thousands except percentage)
Income tax (expense) benefit	$	(78	)	$	(1	)	$	8	$	(77	)		7700	%

Liquidity and Capital Resources

As of December 31, 2021 and 2020, we had cash and cash equivalents of $559.5 million and $73.5 million, respectively. Historically, the primary sources of our liquidity have been cash generated from our operations and the issuance of shares of our common stock. In June 2020, we completed a follow-on public offering of our shares, resulting in net proceeds to us of $45.8 million after deducting underwriting discounts and commissions and deferred offering costs. On July 24, 2020, we paid down all outstanding loans with The Bank of Tokyo Mitsubishi UFJ, Ltd. ("MUFG") of $35.0 million and closed our credit facilities with MegaChips Corporation and Sumitomo Mitsui Banking Corporation ("SMBC"). On February 22, 2021, we completed an additional follow-on

47

public offering, in which we issued and sold 1,500,000 shares of our common stock, resulting in net proceeds to us of $181.6 million after deducting underwriting discounts and commissions and deferred offering costs. On November 10, 2021 we completed a follow-on public offering, in which we issued and sold 1,300,000 shares of our common stock, resulting in net proceeds to us of $279.0 million after deducting underwriting discounts and commissions and deferred offering costs.

Our principal use of cash is to fund our operations to support growth. Our purchase obligations primarily include design and simulation licenses. As of December 31, 2021, such purchase obligations were $5.4 million. For information about our contractual obligations refer to "Note 5 - Lease" and “Note 6 – Commitments and Contingencies” of the Notes to Consolidated Financial Statements.

We expect to continue our investing activities, primarily in the purchase of property and equipment and capitalized software, to support research and development, sales and marketing, product support, and administrative staff.

We believe that our existing cash and cash equivalents will be sufficient to meet our cash needs for at least the next 12 months. Over the longer term, our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, and the continuing market acceptance of our solutions. In the event that we need to borrow funds or issue additional equity, we cannot provide any assurance that any such additional financing will be available on terms acceptable to us, if at all. If we are unable to raise additional capital when we need it, it would harm our business, results of operations and financial condition.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Year Ended December 31,
	2021			2020			2019
	(in thousands)
Net cash provided by operating activities	$	59,078		$	16,604		$	7,378
Net cash used in investing activities		(33,788	)		(7,793	)		(3,202	)
Net cash provided by financing activities		460,646			1,296			51,353
Net increase in cash and cash equivalents	$	485,936		$	10,107		$	55,529

Operating Activities

In 2021, net cash provided by operating activities of $59.1 million was primarily due to net income of $32.3 million and non-cash expenses of $39.9 million, partially offset by a change in operating assets and liabilities of $13.1 million, Non-cash expenses were mainly related to depreciation and amortization and stock-based compensation expense. The changes in operating assets and liabilities resulted in cash provided primarily due to higher accounts receivables due to timing of shipments and an increase in inventories as we managed our inventory levels, partially offset by lower prepaid expenses and other current assets related to advance payments to suppliers for inventory and higher accounts payable and accrued expenses and other liabilities due to timing of payments.

In 2020, net cash provided by operating activities of $16.6 million was primarily due to a net loss of $9.4 million being more than offset by non-cash expenses of $24.9 million and a change in operating assets and liabilities of $1.1 million. Non-cash expenses were mainly related to depreciation and amortization, stock-based compensation expense, inventory write-down, and impairment of internal-use software. The changes in operating assets and liabilities resulted in cash provided primarily due to higher accounts receivables due to timing of shipments and an increase in inventories as we managed our inventory levels being more than offset by lower prepaid expenses and other current assets related to advance payments to suppliers for inventory and higher accounts payable and accrued expenses and other liabilities due to timing of payments.

Investing Activities

Our investing activities consist primarily of capital expenditures for property and equipment purchases. Our capital expenditures for property and equipment have primarily been for general business purposes, including machinery and equipment, leasehold improvements, acquired software, internally developed software used in production and support of our products, computer equipment used internally, and production masks to manufacture our products.

48

In 2021, cash used in investing activities was $33.8 million. We paid $30.9 million largely to purchase test and other manufacturing equipment to support the increase in demand of our products and other property and equipment for general business purposes. We paid $2.9 million to purchase intangible assets.

In 2020, cash used in investing activities was $7.8 million and consisted primarily of the purchase of production masks, internally developed software, and other property and equipment for general business purposes.

Financing Activities

Cash provided by financing activities includes proceeds from borrowings and payments under our credit facilities and proceeds from issuance of shares.

In 2021, cash provided by financing activities was $460.6 million, consisting of proceeds from issuance of shares of $461.3 million net of underwriting commissions and discounts of $21.7 million and deferred offering costs of $0.6 million.

In 2020, cash provided by financing activities was $1.3 million, consisting of proceeds from issuance of shares of $45.8 million net of underwriting commissions and discounts of $2.7 million and deferred offering costs of $0.3 million and borrowings of $35.0 million offset by repayments of $76.0 million under our short-term revolving line of credit and $3.5 million payment of tax withholdings paid on behalf of employees for net share settlement at the time of vesting.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.

Revenue Recognition

We derive our revenue from product sales to distributors and resellers, who in turn sell to original equipment manufacturers or other end customers. We recognize product revenue, at a point in time, upon shipment when we satisfy our performance obligations as evidenced by the transfer of control of our products to customers. We measure revenue based on the amount of consideration we expect to be entitled to in exchange for products. Variable consideration is estimated and reflected as an adjustment to the transaction price. We determine variable consideration at the end of each reporting period, which consists primarily of price adjustments and product returns by estimating the amount of consideration we expect to receive from our customers based on historical experience. If variable considerations are anticipated to exceed historical experience, we may adjust our sales returns allowance accordingly to properly reflect our net revenue. Since our performance obligations relate to contracts with a duration of less than one year, we do not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

Inventories

Inventories consist of raw materials, work-in-process, and finished goods and are stated at the lower of standard cost, determined using first-in first out method or market net realizable value. We review and set standard costs to approximate actual manufacturing costs. We perform detailed reviews of the net realizable value of inventories, both on hand as well as for inventories that we are committed to purchase at the end of each reporting period. We write-down the inventory value for estimated deterioration, excess, obsolete and other factors based on management’s assessment of future demand and market conditions of our inventory. These estimates may include uncertain elements such as our demand forecast. These forecasts are developed based on current backlogs, inputs from our customers, and internal analyses which may consists of customer historical purchasing trends, actual and anticipated design wins, market and economic conditions, technology changes, new product introductions, changes in strategic direction and other factors. If our demand forecast for specific products is greater than actual demand and we fail to reduce manufacturing output

49

accordingly, we could be required to write down additional inventory, which would have a negative impact on our gross margin. Once written-down, inventory write-downs are not reversed until the inventory is sold or scrapped.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant date based on the fair value of the equity award and is recognized as expense over the requisite service period, which is generally the vesting period. We have elected to recognize forfeitures as they occur.

The fair value of each restricted stock unit is estimated based on the market price of our common shares on the date of grant.

We amortize stock-based compensation expense for time-based awards under the straight-line attribution method over the vesting period. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. We amortize stock-based compensation expense for performance-based awards using the accelerated method.

Income Taxes

Deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to a level which, more likely than not, will be realized.

A tax position can be recognized only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. We consider many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements under Item 8 for information regarding recently issued accounting pronouncements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

Substantially all of our revenue is denominated in U.S. dollars. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States and, to a lesser extent, in Malaysia, the Netherlands, France, Taiwan, Japan, and Ukraine. Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchanges rates applicable to our business would not have a material impact on our historical consolidated financial statements. We do not currently have a hedging policy with respect to foreign currency exchange risk.

Interest Rate Risk

We had cash and cash equivalents of $559.5 million and $73.5 million as of December 31, 2021 and 2020, respectively, consisting of bank deposits. Such interest-earning instruments carry a degree of interest rate risk. To date, fluctuations in interest income have not been significant, and we believe that an immediate 10% change in interest rates would not have a material effect on our cash and cash equivalents. We paid down all our debt in the year 2020.

We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Our exposure to interest rates relates to the change in the amounts of interest we must pay on our short-term revolving line of credit which changes at time of renewals. The effect of a hypothetical 10% change in interest rates applicable to our business would not have a material impact on our historical consolidated financial statements.

50

Item 8. Financial Statements and Supplementary Data.

Index to Consolidated Financial Statements and Financial Statement Schedule
	Page
Report of Independent Registered Public Accounting Firm (BDO USA, LLP, San Jose, California, PCAOB ID#243)	53
Consolidated Balance Sheets	54
Consolidated Statements of Operations and Comprehensive Income (Loss)	55
Consolidated Statements of Stockholders’ Equity	56
Consolidated Statements of Cash Flows	57
Notes to Consolidated Financial Statements	58
Schedule II – Valuation and Qualifying Accounts	87

51

Report of Independent Registered Public Accounting Firm



Shareholders and Board of Directors

SiTime Corporation

Santa Clara, California

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of SiTime Corporation (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventories

As described in Note 1 to the consolidated financial statements, the Company’s consolidated inventory balance is stated at lower of

52

cost or net realizable value. The valuation of inventories is adjusted by the Company when conditions indicated a decline in value due to obsolescence and is based on estimates for inventory levels in excess of management’s forecasted demand. Forecasting customer demand can be challenging due to uncertain elements such as market conditions outside the Company’s control.

We identified the valuation of inventory as a critical audit matter. To value inventory, management makes significant judgments related to: i) forecasting future demand for excess units on hand based on the Company’s historical sales and market conditions, and ii) obsolescence of certain products based on forecasted demand. Auditing these elements involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter included:

•Assessing the appropriateness of management’s valuation methodology by evaluating quantitative and qualitative factors including (i) excess units on hand based on ending inventory quantities compared to forecasted shipment quantities, and (ii) obsolete inventory based on age, quality and other specifically identified units.

•Testing the accuracy and completeness of underlying data used in management’s excess and obsolete inventory valuation assessment.

•Evaluating the reasonableness of management's assumptions related to forecasted demand by (i) performing retrospective review of the Company’s prior year estimates to actual results, (ii) evaluating the reasonableness of sales forecasts by comparing to current backlog and historical sales data used in the analysis, and (iii) specific product considerations such as technology changes or alternative uses.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2019.

San Jose, California
 

February 25, 2022

53

SiTime Corporation

Consolidated Balance Sheets

	As of
	December 31, 2021			December 31, 2020
	(in thousands, except per share data)
Assets:
Current assets:
Cash and cash equivalents	$	559,461		$	73,525
Accounts receivable, net		38,376			23,920
Related party accounts receivable		-			736
Inventories		23,630			12,350
Prepaid expenses and other current assets		4,476			2,649
Total current assets		625,943			113,180
Property and equipment, net		37,902			11,708
Intangible assets, net		5,977			2,069
Right-of-use assets, net		8,194			8,892
Other assets		193			162
Total assets	$	678,209		$	136,011
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable	$	13,103		$	6,182
Accrued expenses and other current liabilities		24,282			12,963
Total current liabilities		37,385			19,145
Lease liabilities		6,398			6,986
Other non-current liabilities		1,929			—
Total liabilities		45,712			26,131
Commitments and contingencies (Note 6)
Stockholders’ equity:
Common stock, $0.0001 par value - 200,000 shares authorized;    20,825 and 17,150 shares issued and outstanding at    December 31, 2021 and December 31, 2020		2			2
Additional paid-in capital		663,614			173,274
Accumulated deficit		(31,119	)		(63,396	)
Total stockholders’ equity		632,497			109,880
Total liabilities and stockholders’ equity	$	678,209		$	136,011

The accompanying notes are an integral part of the consolidated financial statements.

54

SiTime Corporation

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Year Ended
	December 31, 2021			December 31, 2020			December 31, 2019
	(in thousands, except per share data)
Revenue	$	218,808		$	116,156		$	84,074
Cost of revenue		79,346			58,224			44,516
Gross profit		139,462			57,932			39,558
Operating expenses:
Research and development		52,104			31,652			23,795
Selling, general and administrative		54,515			34,893			20,636
Total operating expenses		106,619			66,545			44,431
Income (loss) from operations		32,843			(8,613	)		(4,873	)
Interest expense		-			(726	)		(1,714	)
Other expense, net		(488	)		(32	)		(28	)
Income (loss) before income taxes		32,355			(9,371	)		(6,615	)
Income tax (expense) benefit		(78	)		(1	)		8
Net income (loss)	$	32,277		$	(9,372	)	$	(6,607	)
Net income (loss) attributable to common stockholders and    comprehensive income (loss)	$	32,277		$	(9,372	)	$	(6,607	)
Net income (loss) per share attributable to common    stockholders, basic	$	1.70		$	(0.58	)	$	(0.63	)
Net income (loss) per share attributable to common    stockholders, diluted	$	1.53		$	(0.58	)	$	(0.63	)
Weighted-average shares used to compute basic    net income (loss) per share		19,006			16,064			10,558
Weighted-average shares used to compute diluted    net income (loss) per share		21,144			16,064			10,558

The accompanying notes are an integral part of the consolidated financial statements.

55

SiTime Corporation

Consolidated Statements of Stockholders’ Equity

					Additional						Total
	Common Stock				Paid-in			Accumulated			Stockholders'
	Shares		Amount		Capital			Deficit			Equity
	(in thousands)
Balances at December 31, 2018		10,000	$	1	$	58,431		$	(47,417	)	$	11,015
Stock-based compensation expense		—		—		1,379			—			1,379
Net loss		—		—		—			(6,607	)		(6,607	)
Issuance of common stock upon initial public    offering net of underwriting discounts and    commissions and other offering costs		4,945		1		56,352			—			56,353
Issuance of shares upon vesting of restricted stock units, net of tax withholdings		23		—		—			—			—
Balances at December 31, 2019		14,968		2		116,162			(54,024	)		62,140
Stock-based compensation expense		—		—		14,816			—			14,816
Net loss		—		—		—			(9,372	)		(9,372	)
Issuance of common stock upon follow-on public    offering net of underwriting discounts and    commissions and other offering costs		1,525		—		45,789			—			45,789
Issuance of shares upon vesting of restricted stock units, net of tax withholdings		657		—		(3,493	)		—			(3,493	)
Balances at December 31, 2020		17,150	$	2	$	173,274		$	(63,396	)	$	109,880
Stock-based compensation expense		—		—		29,694			—			29,694
Net income		—		—		—			32,277			32,277
Issuance of common stock upon follow-on public    offerings net of underwriting discounts and    commissions and other offering costs		2,800		—		460,646			—			460,646
Issuance of shares upon vesting of restricted stock units		875		—		—			—			—
Balances at December 31, 2021		20,825	$	2	$	663,614		$	(31,119	)	$	632,497

The accompanying notes are an integral part of the consolidated financial statements.

56

SiTime Corporation

Consolidated Statements of Cash Flows

	Year Ended
	December 31, 2021			December 31, 2020			December 31, 2019
	(in thousands)
Cash flows from operating activities:
Net income (loss)	$	32,277		$	(9,372	)	$	(6,607	)
Adjustments to reconcile net loss to net cash provided by
operating activities
Depreciation and amortization expense		7,926			6,402			8,273
Stock-based compensation expense		29,992			16,009			1,379
Inventory write-down		1,817			1,446			321
Impairment of internal-use software		—			959			—
Other		117			106			9
Changes in assets and liabilities:
Accounts receivable		(14,456	)		(6,261	)		1,521
Related party accounts receivable		736			337			363
Inventories		(13,096	)		(2,070	)		8,144
Prepaid expenses and other assets		(1,859	)		2,951			(3,145	)
Accounts payable		5,826			2,606			(1,148	)
Accrued expenses and other liabilities		9,798			3,491			(1,732	)
Net cash provided by operating activities		59,078			16,604			7,378
Cash flows from investing activities
Purchase of property and equipment		(30,878	)		(6,098	)		(1,426	)
Cash paid for intangibles		(2,910	)		(1,695	)		(1,776	)
Net cash used in investing activities		(33,788	)		(7,793	)		(3,202	)
Cash flows from financing activities
Proceeds from public offering, net of underwriting    discounts and commissions and other offering costs		460,646			45,789			56,353
Tax withholding paid on behalf of employees for net share settlement		—			(3,493	)		—
Proceeds from loans from financial institutions		—			35,000			—
Principal payments on loans to financial institutions		—			(76,000	)		(2,000	)
Principal payments on loan to MegaChips		—			-			(3,000	)
Net cash provided by financing activities		460,646			1,296			51,353
Net increase in cash and cash equivalents		485,936			10,107			55,529
Cash and cash equivalents
Beginning of period		73,525			63,418			7,889
End of period	$	559,461		$	73,525		$	63,418
Supplemental disclosure of cash flow information
Interest paid during the period	$	-		$	799		$	2,167
Income taxes paid		24			1			1
Supplemental disclosure of noncash flow information
Unpaid property and equipment		1,437			343			77
Unpaid intangibles, net		3,178			—			—
Right-of-use assets acquired under operating leases		689			382			10,763

The accompanying notes are an integral part of the consolidated financial statements.

57

SiTime Corporation

Notes to Consolidated Financial Statements

1. The Company and Summary of Significant Accounting Policies

SiTime Corporation (the “Company”) was incorporated in the State of Delaware in December 2003. The Company is a provider of silicon timing systems. The Company primarily supplies oscillator products that comprise a MEMS resonator and clock IC that is integrated into a package, as well as standalone resonators. The Company has also started to sample clock ICs. The Company’s products are designed to address a wide range of applications across a broad array of end markets. The Company operates a fabless business model and leverages its global network of distributors and resellers to address the broad set of end markets that it serves.

Outbreak of Coronavirus Disease 2019 (“the COVID-19 pandemic”)

On March 11, 2020, the World Health Organization characterized the outbreak of the coronavirus disease known as COVID-19 as a global pandemic and recommended containment and mitigation measures. On March 13, 2020, the United States declared a national emergency concerning the outbreak, and several states and municipalities have declared public health emergencies. To combat the spread of the COVID-19 pandemic, the United States and other foreign countries in which the Company operates have imposed measures such as quarantines and “shelter-in-place” orders that are restricting business operations and travel and requiring individuals to work from home (“WFH”), which has impacted all aspects of the Company’s business as well as those of the third-parties the Company relies upon for manufacturing, assembly, testing, shipping and other operations.

During 2021, the Company experienced a growth in demand for some of its products, however, there are a number of industry-wide supply constraints affecting the supply of analog circuits manufactured by certain foundries, and affecting outsourced semiconductor assembly and test providers, which has limited and may continue to limit the Company's ability to fully satisfy the increase in demand. If the Company cannot ship its products to its customers on time and in the quantity required as a result of this supply constraint the Company's sales could decline and the Company could lose customers. As a result of the COVID-19 pandemic the Company has also experienced some delay and disruption in the manufacture, shipment, and sales of its products. In addition, the production capabilities of the Company's suppliers have been, and will likely continue to be, impacted as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or WFH orders.

The COVID-19 pandemic has negatively impacted business activity across the globe and has impacted the Company's employees and operations. The inputs into the Company’s judgments and estimates consider the economic implications of the COVID-19 pandemic, as the Company knows them, on the Company’s critical and significant accounting estimates. The extent to which the COVID-19 pandemic may impact the Company’s business will depend on future developments, which are highly uncertain, including the future effects of the COVID-19 pandemic on its employees, customers, suppliers, results of operations, financial condition, or liquidity for 2022 and beyond. To date, the Company has experienced minimal impact from any supplier disruption resulting from COVID-19.

Reporting Calendar

The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a calendar year basis.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Initial and Follow-on Public Offerings

On November 25, 2019, the Company completed its initial public offering (“IPO”), in which it issued and sold 4,945,000 shares of its common stock including the full exercise of the underwriters’ over-allotment option to purchase an additional 645,000 shares at $13.00 per share, resulting in net proceeds of $56.4 million after deducting underwriting discounts, commissions and offering costs of $7.9 million.

58

On June 16, 2020, the Company completed a follow-on public offering (“June 2020 Offering”), in which it issued and sold 1,525,000 shares of its common stock, resulting in net proceeds to the Company of $45.8 million after deducting underwriting discounts and commissions of $2.7 million and deferred offering costs of $0.3 million.

On February 22, 2021, the Company completed an additional follow-on public offering, in which we issued and sold 1,500,000 shares of its common stock, resulting in net proceeds to the Company of $181.6 million after deducting underwriting discounts and commissions of $8.6 million and deferred offering costs of $0.3 million.

On November 10, 2021 the Company completed a follow-on public offering, in which it issued and sold 1,300,000 shares of its common stock, resulting in net proceeds to the Company of $279.0 million after deducting underwriting discounts and commissions of $13.2 million and deferred offering costs of $0.3 million.

Stock Split

On October 16, 2019, a pricing committee of the Company’s board of directors approved an amendment and restatement of the Company’s certificate of incorporation to (i) increase the total number of authorized shares of its common stock to 200,000,000 shares, (ii) change the par value of its common stock to $0.0001 per share, and (iii) effect a 30,000-for-1 stock split of its common stock, which was within the range previously approved by its sole stockholder. These changes became effective upon filing of the Company’s amended and restated certificate of incorporation on October 18, 2019. Subsequently, on November 6, 2019, the Company’s board of directors and sole stockholder approved an amendment and restatement of the Company’s certificate of incorporation to effect a 2-for-3 reverse stock split of its common stock, which became effective on November 6, 2019. The share and per share amounts in these consolidated financial statements and accompanying notes have been adjusted to reflect such stock split and reverse stock split.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The significant areas requiring the use of management estimates and assumptions include revenue recognition, non-recurring engineering services, estimate of reserve for excess and obsolete inventories, sales and warranty reserves, estimate of reserves for accounts receivable, internally developed software capitalization, and valuation allowances for deferred tax assets. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

Foreign Currency Remeasurement

The Company and its wholly-owned subsidiaries use the U.S. dollar as the functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are measured at historical exchange rates. Revenue and expenses are remeasured using an average exchange rate in effect for the period, except for items related to non-monetary assets and liabilities, which are measured at historical exchange rates. Gains or losses from foreign currency remeasurement and transactions are included in other expense, net. For the years ended December 31, 2021, 2020, and 2019, foreign currency remeasurement and transactions gains and losses resulting in a net charge of $0.5 million, $0.1 million and less than $0.1 million, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash balances in the Company’s bank checking and savings accounts and liquid short-term investments with original or remaining maturities of 90 days or less at the date of purchase, readily convertible to known amounts of cash.

Fair Value Measurements

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current liabilities, approximate their fair values due to their short maturities. The Company determines fair value measurements used in its consolidated financial statements based upon the price that would be received to sell an

59

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

At December 31, 2021 and 2020, cash balances in bank checking and savings accounts of $339.3 million and $18.4 million, were valued using Level 1 of the fair value hierarchy. At December 31, 2021 and December 31, 2020, highly liquid money market funds of $220.2 million and $55.1 million, respectively, were valued using Level 1, of the fair value hierarchy, quoted prices in active markets for identical assets and are included in cash equivalents.

There were no transfers between Level 1 and Level 2 categories during any of the periods presented.

Accounts Receivable and Allowances for Credit Losses

Accounts receivable are stated at amounts estimated by management to be net realizable value. An allowance for credit losses is recorded when it is probable that amounts will not be collected based on historical collection trends, age of outstanding receivables, specific customer circumstances, existing economic conditions and future forecasted information. The Company performs periodic credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. Losses have not been significant in any of the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents amount is subject to concentration of credit risk. Substantially all of the Company's cash and cash equivalents balances are in excess of Federal Deposit Insurance Corporation insurance limits with financial institutions.

The Company extends credit based on an evaluation of the customer’s financial condition and collateral is not typically required. The Company primarily sells its products through third-party distributors and resellers. For the years ended December 31, 2021, 2020, and 2019, three distributors directly accounted for 10% or more of the Company’s revenue.

The following table discloses these customers’ percentage of revenue for the respective periods:

	Year Ended December 31,
	2021	2020	2019
Customer
Pernas Electronics Co. Ltd.	24%	26%	17%
Quantek Technology Corporation	10%	18%	22%
Arrow Electronics, Inc.	14%	15%	19%

Revenue from sales to one end customer through multiple distributors accounted for 22%, 40% and 23% of consolidated revenues for the years ended December 31, 2021, 2020, and 2019, respectively. No other distributors or end customers accounted for 10% or more of the Company's consolidated revenues for the years ended December 31, 2021, 2020, and 2019.

60

At December 31, 2021 and 2020, three customers accounted for 10% or more of accounts receivable, as disclosed below:

	As of December 31,
	2021	2020
Customer
Pernas Electronics Co. Ltd.	16%	31%
Quantek Technology Corporation	13%	22%
Smith & Associates	11%	n/a
Arrow Electronics, Inc.	14%	18%

Inventories

Inventories are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. The Company, at least quarterly, assesses the recoverability of all inventories to determine whether adjustments are required to record inventory at the lower of cost or net realizable value. The Company reduces the value of inventory by establishing excess and obsolete inventories reserves based on management’s assessment of future demand and market conditions. Actual demand may differ from forecasted demand and such differences may have a material effect on recorded value of inventory. Inventory reserve write-downs, once established, are not released until the related inventory has been sold or scrapped. Rebates from the Company’s foundries are recorded as a reduction of inventory cost and are recognized in cost of revenue over the inventory turnover days of the Company. Most of the Company’s inventory is warehoused at its contract manufacturers.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets as follows:

Lab and manufacturing equipment	3 to 7 years
Computer equipment	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of remaining lease term or estimated useful lives of the assets

The Company capitalizes the costs of purchased mask sets that are utilized during the photolithography phase of manufacturing our products, when technological feasibility and marketability have been established. The capitalization occurs upon the completion of a detailed design, the absence of significant development uncertainties and the determination of market acceptance. Such amounts are included in property and equipment in the consolidated balance sheets and are amortized to cost of revenue over their estimated useful life of 5 to 7 years. However, if significant uncertainties exist regarding the future utility of a particular mask set, then its related costs are expensed to research and development at the time the significant uncertainties are identified.

Maintenance and repair costs are charged to expense as incurred, and expenditures that extend the useful lives of assets are capitalized. Upon retirement or sale of the property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded in operating expenses.

Intangible Assets

Intangible assets include the costs related to acquired software as well as costs related to software internally developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development. The Company develops proprietary design automation software for its MEMS-based resonators. Costs incurred during the preliminary planning and evaluation stage of the project and during post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the software are capitalized. The Company defines the configuration and coding process as the application development stage. Capitalized internal use software costs are amortized, on a straight-line basis under cost of revenue over the estimated useful life of approximately 2 to 3 years. Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of 3 to 5 years.

61

Leases

The Company applies the guidance in Accounting Standards Codification (“ASC”), Topic 842 to individual leases of assets. The Company recognizes a transaction as a lease when it receives substantially all of the economic benefits from and directs the use of specified property, plant and equipment.

Operating leases are included in right-of-use (“ROU”), assets, accrued expenses and other current liabilities, and lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease. The Company currently does not have any finance leases.

The Company has elected the practical expedient within ASC Topic 842 to not separate lease and non-lease components within lease transactions for all classes of assets. Additionally, the Company has elected the short-term lease exception for all classes of assets and does not apply the recognition requirements for leases of 12 months or less and recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure ROU assets and lease liabilities. The incremental borrowing rate used by the Company was based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

The Company determined that no events or changes in circumstances indicate that impairment of its long-lived assets has occurred.

Warranty

The Company provides limited lifetime warranty coverage on all of its products by guaranteeing that all timing components from the Company will be free from defects in workmanship and materials and will conform to specifications for the life of the system. This assurance-type warranty is not considered a separate performance obligation, and thus no transaction price is allocated to it. The Company records the warranty costs in cost of revenue in the consolidated statements of operations and comprehensive income (loss). The warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within accrued expenses and other current liabilities and other non-current liabilities on the consolidated balance sheets based on the expected timing of the related payments. To date, the Company has had negligible returns of any defective products, and hence the warranty reserve balances as of December 31, 2021 and 2020 were less than $0.1 million.

62

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts in the consolidated financial statements of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards, using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is provided in order to reduce the deferred tax assets to a level which, more likely than not, will be realized.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and The Coronavirus Aid, Relief, and Economic Security (“CARES Act”) , make broad and complex changes to the U.S. tax code. These computations require significant judgments and estimates to be made regarding the interpretation of the provisions within the Tax Act along with the preparation and analysis of information not previously required.

While the Company believes it has adequately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes and the effective tax rate in the period in which such determination is made.

The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority. Liabilities are established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements. The Company reports interest and penalties related to uncertain tax positions, if any, in the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall provision for income taxes in the period that such determination is made.

Revenue Recognition

The Company derives revenue from its product sales to distributors and resellers, who in turn sell to original equipment manufacturers or other end customers. The Company recognizes product revenue, at a point in time, upon shipment when it satisfies its performance obligations as evidenced by the transfer of control of its products to customers. The Company measures revenue based on the amount of consideration it expects to be entitled to in exchange for products. Variable consideration is estimated and reflected as an adjustment to the transaction price. The Company determines variable consideration, which consists primarily of price adjustments and product returns by estimating the amount of consideration the Company expects to receive from its customers based on historical experience of price adjustments and product returns. Initial estimates of price adjustments and product returns are updated at the end of each reporting period if additional information becomes available. Changes to the Company’s estimated variable consideration were not material for the periods presented. Since the Company’s performance obligations relate to contracts with a duration of less than one year, it does not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

The Company’s payment terms vary by contract type and type of customer and generally range from 30 to 60 days from shipment. The Company has also elected to recognize the cost for freight and shipping when control over the products sold passes to customers and revenue is recognized.

As a practical expedient, the Company records the incremental costs of obtaining a contract, consisting primarily of sales commissions, when incurred because the amortization period is one year or less. These costs are recorded within sales and marketing expenses. The Company entered into a distribution agreement with MegaChips, whereby the Company appointed MegaChips as the exclusive distributor of its products in Japan. The Company recognizes revenue upon shipment derived from sales of products through MegaChips in the amount of expected payments from parties which purchased the products as adjusted for estimated price concessions and product returns. In connection with the Company's efforts to contract directly with distributors in Japan, the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

63

Cost of Revenue

Cost of revenue consists of wafers acquired from third-party foundries, assembly, packaging, and test cost of the Company’s products paid to third-party contract manufacturers, and personnel and other costs associated with the manufacturing operations of the Company. Cost of revenue also includes depreciation of production equipment, inventory write-downs, amortization of internally developed software, shipping and handling costs, and allocation of overhead and facility costs. The Company also includes credits for rebates received from foundries in cost of revenue.

Research and Development Expenses

Research and development costs consist primarily of personnel cost, material cost, and facilities related expenses, incurred in the course of planned research and development of new products. Research and development costs are expensed as incurred.

Non-recurring engineering services

The Company has certain contracts to provide non-recurring engineering (NRE) services for research and development arrangements through 2023, which do not meet the requirement to be accounted for under ASC 606, Revenue from Contracts with Customers. The Company recognizes the payments received under these NRE arrangements as liabilities and recognizes them as an offset to research and development expense as the company achieve the milestones of the contract. As the progress towards completion occurs, the Company uses an input method based on the ratio of costs incurred to date to total estimated costs of the project. Significant judgment is required to estimate the remaining effort to complete the project. These estimates are reassessed throughout the term of the arrangement. A liability of $5.7 million and $0.5 million was recorded as accrued expenses and other current liabilities, and other non-current liabilities, respectively, in the consolidated balance sheet as of December 31, 2021. For the year ended December 31, 2021, the Company recorded $2.4 million as a reduction of research and development expenses in the consolidated statement of operations. There were no reduction of research and development expenses recorded during the years ended December 31, 2020 and 2019.

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel costs, field application engineering support, travel costs, professional and consulting fees, accounting and audit fees, legal, advertising expenses, and allocated overhead costs. Selling, general and administrative costs are expensed as incurred. Advertising expenses were $1.5 million, $0.3 million and $0.3 million, for the years ended December 31, 2021, 2020 and 2019, respectively.

Stock-Based Compensation

The Company grants restricted stock units (“RSUs”) of its own common stock and such grants are valued at the fair market value of the Company’s stock on the date of the grant and recognizes the compensation expense using the straight-line method over the requisite service period.

The Company amortizes stock-based compensation expense for time-based awards under the straight-line attribution method over the vesting period. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. The Company amortizes stock-based compensation expense for performance-based awards using the accelerated method.

The Company recognizes forfeitures as they occur.

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. Refer to "Note 3 - Net Income (Loss) Per Share" for further discussion regarding potentially dilutive and anti-dilutive securities.

64

Comprehensive Income (Loss)

The Company has no components of other comprehensive income loss. Therefore, net income (loss) equals comprehensive income (loss) for all periods presented. 

2. Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this standard on January 1, 2021 did not have any impact on the Company’s consolidated financial position, results of operations, cash flows or financial disclosures. 

3. Net Income (Loss) Per Share

The following table summarizes the computation of basic and diluted net income (loss) per share attributable to common stockholders of the Company:

	Year Ended December 31
	2021		2020			2019
	(in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	32,277	$	(9,372	)	$	(6,607	)
Weighted-average shares outstanding
Weighted average shares used to    compute basic net income (loss) per share		19,006		16,064			10,558
Dilutive effect of employee equity incentive plans		2,138		-			-
Weighted average shares used to    compute diluted net income (loss) per share		21,144		16,064			10,558
Net income (loss) attributable to common    stockholders per share, basic	$	1.70	$	(0.58	)	$	(0.63	)
Net income (loss) attributable to common    stockholders per share, diluted	$	1.53	$	(0.58	)	$	(0.63	)

Potential dilutive securities include dilutive common shares from share-based awards attributable to the assumed exercise of vested restricted stock units using the treasury stock method. Under the treasury stock method, potential common shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive.
 

Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share if either their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method. During the year ended December 31, 2021, 2020 and 2019 the Company had 3,955, 2,095,135 and 118,545 potential shares from share-based awards that are anti-dilutive, respectively. Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted loss per share for the years ended December 31, 2020 and 2019 due to the net losses reported in these periods.

65

4. Balance Sheets Components

Accounts Receivable, net

Accounts receivable, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Accounts receivable, gross	$	38,426		$	23,970
Allowance for credit losses		(50	)		(50	)
Accounts receivable, net	$	38,376		$	23,920

Inventory

Inventory consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Raw materials	$	1,841	$	435
Work in progress		16,963		10,184
Finished goods		4,826		1,731
Total inventories	$	23,630	$	12,350

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Advance to suppliers	$	—	$	853
Prepaid expenses		2,398		1,074
Other current assets		2,078		722
Total prepaid and other current assets	$	4,476	$	2,649

Property and Equipment, Net

Property and equipment, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Lab and manufacturing equipment	$	44,283		$	21,958
Computer equipment		1,977			1,121
Furniture and fixtures		433			237
Construction in progress		7,100			638
Leasehold improvements		5,211			4,134
		59,004			28,088
Accumulated depreciation		(21,102	)		(16,380	)
Total property and equipment, net	$	37,902		$	11,708

66

Depreciation expense related to property and equipment was $5.7 million, $3.7 million, and $3.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Intangible Assets, Net

Intangible assets, net consisted of the following:

	As of
	December 31, 2021							December 31, 2020
	(in thousands)
	Gross Assets		Accumulated Amortization			Net Assets		Gross Assets		Accumulated Amortization			Net Assets
	(in thousands)
Internal use software	$	9,434	$	(8,633	)	$	801	$	9,377	$	(8,312	)	$	1,065
Purchased intangibles		11,703		(6,527	)		5,176		5,663		(4,659	)		1,004
Intangible assets	$	21,137	$	(15,160	)	$	5,977	$	15,040	$	(12,971	)	$	2,069

Amortization expense for intangible assets was $2.2 million, $2.7 million, and $4.9 million, for the years ended December 31, 2021, 2020 and 2019, respectively. During the year ended December 31, 2021, the Company purchased and capitalized software costs of $6.0 million to support research and development efforts. During the year ended December 31, 2020, the Company recorded impairment charges of $1.0 million related to capitalized cost of software that was within the development phase and was being developed solely to meet the Company’s internal needs. The impairment charge was recorded as research and development expense in the consolidated statement of operations.

As of December 31, 2021 and 2020, the Company had $0.8 million and $0.7 million, respectively, of intangibles that were still in development stage and were not being amortized. The estimated aggregate future amortization expense for intangible assets in development stage and subject to amortization as of December 31, 2021 is summarized as below:

	As of
	December 31, 2021
	(in thousands)
2022	$	2,277
2023		2,207
2024		1,311
2025		168
2026		14
	$	5,977

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Accrued payroll and related benefits	$	7,237	$	5,362
Deferred non-recurring engineering services		5,666		-
Revenue reserves		4,517		3,063
Short term lease liability		1,336		1,264
Accrued customer rebates		784		380
Other accrued expenses		4,742		2,894
Total accrued expenses and other current liabilities	$	24,282	$	12,963

5. Leases

The Company leases real estate property under operating leases.

67

The Company signed a non-cancellable operating lease agreement for its corporate headquarters in Santa Clara, California, that commenced on October 20, 2016 and will expire on December 31, 2026. In January 2021, the Company signed an amendment to its Santa Clara office space lease where the lessor provided the Company lease incentives of $0.4 million and extended the term of the lease by three months. The amendment was accounted as a single modified lease and the remaining payments were remeasured using an updated discount rate. The agreement provides for an option to renew for an additional 5 years and for monthly rent payments through the term of the lease.

The Company leases office space in Santa Clara, Michigan, Malaysia, Japan, Taiwan, the Netherlands, and Ukraine all under non-cancellable operating leases with various expiration dates through March 2027. The remaining lease terms vary from a few months to 6 years. For its leases the Company has options to extend the lease term for periods varying from one to five years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. The Company also has variable lease payments that are primarily composed of common area maintenance and utility charges.

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of December 31, 2021 and 2020:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Right-of-use assets	$	8,194		$	8,892
Lease liabilities included in accrued expenses    and other current liabilities		1,336			1,264
Lease liabilities - non-current		6,398			6,986
Total operating lease liabilities	$	7,734		$	8,250
Weighted-average remaining lease term (years)		5.0			5.9
Weighted-average discount rate		4.5	%		4.2	%

The table below presents certain information related to the lease costs for operating leases for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31
	2021		2020		2019
	(in thousands)
Operating lease cost	$	1,761	$	1,696	$	1,419
Short-term lease cost		579		356		313
Variable lease cost		599		332		494
Total lease cost	$	2,939	$	2,384	$	2,226

Cash paid for operating lease liabilities was $1.7 million, $2.3 million, and $3.9 million for the years ended December 31, 2021, 2020, and 2019 respectively. The Company sub-leased a portion of its Santa Clara facility through March 31, 2019 and received $0.1 million in sub-lease income for the year ended December 31, 2019, which was included in the short-term lease cost above.

68

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2021:

	(in thousands)
2022	$	1,633
2023		1,737
2024		1,698
2025		1,580
2026		1,622
2027 and beyond		416
Total minimum lease payments		8,686
Less: amount of lease payments representing    interest		(952	)
Present value of future minimum lease payments		7,734
Less: current obligations under leases		(1,336	)
Long-term lease liabilities	$	6,398

During the three months ended December 2021, the Company entered into three operating leases that commence in 2022 with 2 to 5.3 year terms, for which the Company expects to record Right-of Use Asset of approximately $3.0 million and a Lease Liability of approximately $3.0 million at the commencement of these leases.

6. Commitments and Contingencies

Purchase Commitments

The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and to help ensure adequate component supply, the Company enters into agreements with the Company’s contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by the Company. A portion of the Company’s reported purchase commitments arising from these agreements consists of firm, non-cancelable purchase commitments. In certain instances, these agreements allow the Company the option to cancel, reschedule, and adjust the Company’s requirements based on its business needs prior to when production starts. However, in situations where the Company is unable to cancel, reschedule, or adjust the purchase commitment due to changing customer demand, excess inventories could result in material inventory provisions. As of December 31, 2021, the Company had commitments totaling $5.4 million primarily for design and simulation licenses which will be paid through June 2024.

Commitments for MEMS Wafer Supplier Agreement

The Company purchases MEMS wafers required for its silicon timing systems products under a multi-year manufacturing agreement with a third-party supplier. Under this agreement, the Company has agreed to minimum quantity purchase commitments and is responsible for research and development, tooling, and samples cost, in addition to wafer costs. The Company has historically met the supplier’s minimum wafer quantity requirements.

Indemnification

The Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify other parties to such agreements with respect to certain matters. Typically, these obligations arise in the context of contracts that the Company has entered into, under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants or terms and conditions related to such matters as the sale and/or delivery of its products, title to assets sold, certain intellectual property claims, defective products, specified environmental matters, and certain income taxes. Further, the Company’s obligations under these agreements may be limited in terms of time, amount, or the scope of its responsibility and in some instances, the Company may have recourse against third parties for certain payments made under these agreements. It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, the Company has had no material indemnification claims under these agreements.

69

Legal Matters

From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determined that such a liability for litigation and contingencies are both probable and reasonably estimable.

In March 2019, VTT Technical Research Centre of Finland, Ltd. ("VTT") filed suit in the United States District Court for the Northern District of California alleging infringement by the Company of a patent relating to specific combinations of features set forth in U.S. Patent No. 8,558,643. The complaint sought unspecified monetary damages and injunctive relief. On January 22, 2020, the Company participated in a mediation that had been ordered by the Court. The case was not resolved at the mediation. A Markman Hearing was held on May 15, 2020 relating to a number of different disputed claim terms, and on July 9, 2020 the Court issued a Markman Order relating to those disputed claim terms. Among its determinations, the Court found that one of the disputed claim terms was indefinite, as well as any claim that had this claim term in it. On July 17, 2020, the Court issued a judgment finding all claims of U.S. Patent No. 8,558,643 invalid, based upon its Markman Order. VTT filed a Notice of Appeal of the Court's judgment with the US Court of Appeals for the Federal Circuit and filed its opening brief on November 19, 2020 and the Company filed its response brief on January 28, 2021. VTT filed its reply on March 4, 2021. On June 9, 2021, a hearing was held at the CAFC and on June 10, 2021 the CAFC affirmed the Court’s judgment. The Company believes this litigation matter is now fully resolved.

7. Debt Obligations

Terminated Revolving Lines of Credit and Loans

The Bank of Tokyo-Mitsubishi Credit Facility

On August 31, 2015, the Company entered into a bank transaction agreement with The Bank of Tokyo Mitsubishi UFJ, Ltd. ("MUFG"). The agreement provided for a revolving line of credit with a maximum available borrowing of $20.0 million, which was increased to $50.0 million in June 2018. Between August 2015 and December 31, 2019, the Company borrowed $139.0 million in several draw-downs against the revolving line of credit with terms ranging from one month to one year and interest rate ranging between 1.01% to 4.07%.

On July 24, 2020, the Company paid $76.0 million to pay down all outstanding loans and cancel the line of credit with MUFG of which $12.0 million of loans were prepaid with a penalty of $0.1 million.

Sumitomo Mitsui Banking Corporation Credit Facility

On September 22, 2017, the Company entered into an uncommitted and revolving credit line agreement with Sumitomo Mitsui Banking Corporation (SMBC). The revolving credit line has a maximum available borrowing availability of up to $20.0 million. The Company could draw loans under the revolving credit line from time to time through September 21, 2018, as long as the principal amount at any time did not exceed $20.0 million in the aggregate. Such term was extended for an additional year through September 20, 2019 and further extended for an additional year through September 21, 2020. The Company repaid the remaining outstanding balance of $2.0 million on the SMBC revolving credit line during 2019 and closed its line of credit in September 2020.

MegaChips Loan

On September 13, 2016, the Company entered into a loan agreement with MegaChips for a revolving credit limit of up to $30.0 million (the “MegaChips Loan Agreement”). Loans under the MegaChips Loan Agreement bore interest at a rate equal to the interest rate at which MegaChips procured the funds from SMBC, plus 0.09%. The outstanding balance of $3.0 million under the revolving line with MegaChips was repaid on December 12, 2019 upon maturity. During the year ended December 31, 2020, the Company closed its revolving line of credit with MegaChips.

70

8. Stockholders’ Equity

The Company’s certificate of incorporation, as amended and currently in effect, authorizes the Company to issue 200,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding. The Company has never declared any dividends.

9. Stock-based Compensation

SiTime Corporation 2019 Stock Incentive Plan

Upon completion of its IPO in November 2019, the Company adopted the SiTime Corporation 2019 Stock Incentive Plan (the “2019 Plan”), which initially reserved approximately 3.4 million shares of the Company’s common stock. The 2019 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation (collectively, “stock awards”), and cash awards, all of which may be granted to employees (including officers), directors, and consultants or affiliates. Awards granted under the 2019 Plan vest at the rate specified by the plan administrator, for restricted stock unit awards primarily over two to five years. As of December 31, 2021, 0.4 million shares were still reserved for issuance.

Activity of RSUs, cash restricted stock unit award (“CRSU”) and performance based restricted stock unit awards ("PRSU") granted under the 2019 Plan is set forth below:

	RSU			Grant Date		CRSU			Grant Date		PRSU		Grant Date
	Number of			Fair Value		Number of			Fair Value		Number of		Fair Value
	Shares			per share		Shares			per share		Shares		per share
Balance at December 31, 2018		—			—		—			—		—		—
Granted		3,012,399			13.00		—			—		—		—
Vested		(23,077	)		13.00		—			—		—		—
Forfeited		-			—		—			—		—		—
Balance at December 31, 2019		2,989,322			13.00		—			—		—		—
Granted		682,517			53.42		11,844			48.62		—		-
Vested		(766,934	)		15.46		(11,220	)		49.37		—		-
Forfeited		(169,199	)		13.72		—			—		—		—
Balance at December 31, 2020		2,735,706			22.35		624			35.05		—		-
Granted		438,474			128.55		3,025			111.93		58,954		261.39
Vested		(874,462	)		27.94		(3,649	)		98.78		—		-
Forfeited		(72,521	)		33.34		—			—		—		—
Balance at December 31, 2021		2,227,197			40.56		—			-		58,954		261.39

The difference between the number of RSUs vested and the shares of common stock issued during the year ended December 31, 2020 is the result of RSUs withheld in satisfaction of minimum tax withholding obligations associated with the vesting. The total fair value, as of the vesting date, of awards vested during the years ended December 31, 2021, 2020 and 2019 were $161.2 million, $43.7 million and $0.3 million, respectively.

Executive Bonus and Retention Plan

On August 4, 2020, the Compensation Committee of the Company adopted and approved the Executive Bonus and Retention Plan (the “Bonus and Retention Plan”). In August 2020, the Compensation Committee approved target bonus amounts and performance goals for the second half of the fiscal year 2020 (the “2020 Goals”), in January 2021, the Compensation Committee approved target bonus amounts and performance goals for the first half of the fiscal year 2021 (the “1H2021 Goals”), and in July 2021 the Compensation Committee approved target bonus amounts and performance goals for the second half of the fiscal year 2021 (the “2H2021 Goals”). The 2020 Goals, the 1H2021 Goals and the 2H2021 Goals are based on the achievement of revenue and Non-GAAP operating profit, as well as individual performance goals. The awards for the actual payouts are granted in the quarter following the end of the performance period. The target bonuses were granted based on a fixed dollar amount to be settled in a variable amount of RSUs on the vesting date and hence the awards have been classified as liability-based awards until settled. Such expense is included in the non-cash adjustment within stock-based compensation expense on the consolidated cash flow statements.

71

When such awards are granted in RSUs upon achievement of goals, the Company reclassifies the liability to additional paid in capital. The liability of $1.5 million for 2H2021 Goals was recorded as accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 2021. Actual payouts for 2020 Goals ranged from 119% to 144% of target, for 1H2021 Goals ranged from 76% to 141% of target, and 2H2021 Goals ranged from 138% to 150% of target, in each case based on performance.

On December 17, 2021, the Compensation Committee of the Company approved PRSUs with performance goals for the year 2022 (the “PRSU 2022 Goals”). The PRSU 2022 Goals are based on the achievement of revenue. These grants are included in the RSU awards granted in the table above.

In the year ended December 31, 2020, the Company granted CRSUs as part of an employee bonus plan. The Company ended this program effective April 1, 2021. Generally, such units were granted quarterly and fully vested at the end of the quarter they were granted except units granted to new hires that had a one-year cliff vesting. Such awards were classified as liability-based awards.

Total stock-based compensation expense for employees recognized in the consolidated statements of operations and comprehensive income (loss) was as follows:

	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Equity based awards
Cost of revenue	$	1,654	$	613	$	36
Research and development		11,087		4,682		346
Selling, general and administrative		14,422		9,521		997
	$	27,163	$	14,816	$	1,379
Liability based awards - to be settled in equity
Cost of revenue	$	114	$	—	$	—
Research and development		492		445		-
Selling, general and administrative		2,223		748		-
		2,829		1,193		-
Total stock-based compensation - equity and liability based	$	29,992	$	16,009	$	1,379
Liability based awards - cash settled
Cost of revenue	$	102	$	264	$	—
Research and development		143		415		-
Selling, general and administrative		108		278		-
	$	353	$	957	$	—
Total stock-based compensation expense	$	30,345	$	16,966	$	1,379
Stock-based compensation expense recorded to additional paid-in capital
Equity based awards	$	27,163	$	14,816	$	1,379
Liability based awards - settled in equity		2,531		-		-
Total stock-based compensation expense recorded to additional paid-in capital	$	29,694	$	14,816	$	1,379

At December 31, 2021, there was $82.5 million and $0.6 million of unrecognized compensation costs related to RSUs granted and liability-based awards, respectively. The unrecognized compensation cost is expected to be recognized over a weighted average period of 3.24 years and 0.43 years for liability-based awards.

72

10. Income Taxes

The components of income (loss) before income taxes were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	32,379		$	(9,645	)	$	(6,485	)
Foreign		(24	)		274			(130	)
	$	32,355		$	(9,371	)	$	(6,615	)

The components of income tax (expense) benefit were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	(12	)	$	(1	)	$	8
Foreign		(66	)		—			—
	$	(78	)	$	(1	)	$	8

The material components of the deferred tax assets and liabilities consisted of net operating loss carry-forwards and tax credit carry-forwards.

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
Deferred tax assets (liabilities):
Accrual, write-down and other	$	5,442		$	3,249		$	2,469
Depreciation and amortization		(818	)		257			76
Net operating loss and credits carry forwards		64,690			52,445			42,949
Total gross deferred tax assets (liabilities)		69,314			55,951			45,494
Valuation allowance		(69,314	)		(55,951	)		(45,494	)
Total net deferred tax assets	$	—		$	—		$	—

The net valuation allowance increased by $13.4 million for the year ended December 31, 2021.

A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate is as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
US Federal Rate		21.0	%		21.0	%		21.0	%
R&D Credits		-			-			(10.9	)
Permanent differences and others		(63.3	)		90.4			(18.3	)
Change in valuation allowance		42.3			(111.4	)		8.2
		0.0	%		0.0	%		0.0	%

The reported amount of income tax expense differs from an expected amount based on statutory rates primarily due to the Company’s valuation allowance.

As of December 31, 2021 and 2020, based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be realized. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at December 31, 2021 and 2020.

73

At December 31, 2021 and 2020, the Company has federal net operating loss carry-forwards of approximately $259.6 million and $201.5 million, respectively, and state net operating loss carry-forwards of approximately $64.5 million and $64.0 million, respectively. At December 31, 2021 and 2020, the Company has net operating loss carryforwards for foreign income tax purposes of approximately $2.3 million and $2.2 million, respectively. These federal, state, and foreign net operating loss carry-forwards will expire beginning in 2025, 2028, and 2028, respectively. Of the total federal net operating loss carryforward, $111.2 million will not expire as a result of the Tax Act.

At December 31, 2021 and 2020, the Company also has federal research and development tax credit carry-forwards of approximately $3.9 million and $3.9 million, respectively, and state research and development tax credit carry-forwards of approximately $3.6 million and $3.6 million, respectively. The federal tax credits begin to expire in 2025, and the California tax credits carry forward indefinitely.

Utilization of the net operating loss carry-forwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (“the Code”), and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

As of December 31, 2021 and 2020, the Company had $2.4 million and $2.4 million of total unrecognized tax benefits. The Company currently has a full valuation allowance against its net deferred tax assets which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. If the Company is able to eventually recognize these uncertain tax positions, none of the unrecognized benefit would reduce the Company’s effective tax rate due to full valuation allowance of the Company’s deferred tax assets. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2021 and 2020, the Company had immaterial amounts related to the accrual of interest and penalties.

A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows:

	December 31,
	2021			2020
	(in thousands)
Beginning balance	$	2,436		$	2,184
Increase (decrease) in balance related to tax position taken during prior periods		—			—
Increase (decrease) in balance related to tax position taken during the current period		(5	)		252
Ending balance	$	2,431		$	2,436

The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the years ended December 31, 2021 and 2020.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, local, and foreign jurisdictions, where applicable. Due to the Company’s net losses, its federal, state and local, and foreign tax returns since inception are subject to audit.

As of December 31, 2021, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are as follows:

Jurisdiction	Earliest Tax Year Subject to Examination
U.S. federal	2018
California State	2017
Michigan State	2017

11. 401(k) Plan

The Company has a 401(k) retirement plan that qualifies as a defined contribution plan. All employees are eligible to participate on the first day of the month following their hire date with the Company. Under the defined contribution plan, employees may contribute up to the lesser of 90% of their pre-tax salaries per year or the maximum contribution allowed under the Code. The Company may make discretionary matching contributions, if deferral contributions are made by the employees. The Company’s

74

matching contributions for the years ended December 31, 2021, 2020, and 2019 resulted in expense of $1.0 million, $0.6 million, and $0.6 million respectively.

12. Segment Information and Operations by Geographic Area

The Company operates in one reportable segment related to the design, development, and sale of silicon timing systems solutions. The chief operating decision maker, for the Company is the Chief Executive Officer. The Company’s Chief Executive Officer reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a single reportable and operating segment structure.

Revenue by geographic area are presented based upon the ship-to location of the original equipment manufacturers, the contract manufacturers, or the distributors who purchased the Company’s products. For sales to the distributors, their geographic location may be different from the geographic locations of the ultimate end customers. The following table sets forth revenue by country for countries with 10% or more of the Company’s revenue during any of the periods presented:

	Year Ended
	December 31, 2021		December 31, 2020		December 31, 2019
	(in thousands)
Taiwan	$	66,390	$	55,789	$	39,060
Hong Kong		82,503		30,306		16,534
United States		14,221		8,522		5,677
Other		55,694		21,539		22,803
Total	$	218,808	$	116,156	$	84,074

The following table sets forth the Company’s total property and equipment and intangible assets attributable to operations by country as of the periods presented:

	As of
	December 31, 2021			December 31, 2020
United States		57	%		68	%
Malaysia		31	%		7	%
Taiwan		5	%		12	%
Other		7	%		13	%

13. Related Party Transactions

The Company entered into an agreement with MegaChips, whereby the Company appointed MegaChips as a non-exclusive sales representative of its products in Japan. The Company sold products through MegaChips to distributors, resellers, or direct customers in Japan. The Company paid MegaChips a fixed percentage of the revenue as sales commission, which is recorded as commission expense and included in sales and marketing in the consolidated statements of operations and comprehensive loss. In connection with the Company's efforts to contract directly with distributors in Japan, the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

MegaChips has been the largest stockholder of the Company and held approximately 24.0% and 43.7% of the Company’s outstanding common stock as of December 31, 2021 and December 31, 2020, respectively.

As of December 31, 2021 and 2020, the Company had accounts receivable from MegaChips of $0.0 million and $0.7 million, respectively.

During the year ended December 31, 2020, the Company entered into an asset purchase agreement with MegaChips Corporation. The Company recorded the equipment of $0.1 million on the consolidated balance sheet under “Property and equipment, net.”

75

During the year ended December 31, 2020 the Company entered into an equipment purchase agreement with MegaChips Taiwan Corporation, a wholly-owned subsidiary of MegaChips Corporation. The Company recorded the equipment of $0.1 million on the consolidated balance sheet under “Property and equipment, net.”

During the year ended December 31, 2020 the Company entered into a services and secondment agreement with MegaChips LSI USA Corporation, a wholly-owned subsidiary of MegaChips Corporation. The Company records the transactions as consulting expenses as part of its research and development expense on the consolidated statement of operations and comprehensive loss. The service and secondment agreement with MegaChips LSI USA Corporation was terminated on August 31, 2021.

In May 2021, the Company signed a consulting agreement with Akira Takata, a member of the Board of Directors of the Company. As a consultant, Mr. Takata provided sales consulting services through December 31, 2021, for which he received monthly cash fees of $5,000, reimbursement of expenses, and an equity award of 500 RSUs that fully vested on November 20, 2021. In December 2021, the Company signed an amendment to extend the consulting agreement with Akira Takata through December 31, 2022.

The following is a summary of significant balances, transactions and payments with the related parties and affiliates.

Components of Statement of Operations and Comprehensive Loss	Year ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Sales through distribution agreement	$	8,167	$	5,714	$	5,071
License expense		—		148		158
Commission expense		340		228		202
Interest expense		—		—		94
Affiliates
Consulting fees		254		380		—

Components of Consolidated Cash Flows	Year Ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Cash paid for principal	$	—	$	—	$	3,000
Cash paid for equipment		—		209		—
Cash paid for commissions		340		228		228
Cash paid for licenses		—		25		329
Affiliates
Cash paid for consulting fees		254		380		—

14. Subsequent Events

Adoption of Inducement Plan

On February 23, 2022, the Compensation Committee of the Board of Directors of SiTime (the “Committee”) approved and adopted the SiTime Corporation 2022 Inducement Award Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity or equity-based awards in the form of non-qualified stock options, restricted stock units, and other stock-based awards. The Inducement Plan’s terms are substantially similar to the terms of SiTime’s 2019 Stock Incentive Plan, with the addition of certain terms and conditions intended to comply with the Nasdaq inducement award exception. The Inducement Plan was adopted by the Committee without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.

The Committee has reserved 250,000 shares of SiTime’s common stock for issuance pursuant to awards granted under the Inducement Plan (subject to customary adjustments in the event of a change in capital structure of SiTime). Awards under the Inducement Plan may be granted only to employees who satisfy the standards for inducement grants under Rule 5635(c)(4) of the Nasdaq Listing Rules, and only when the award is an inducement material to such individual’s entering into employment with SiTime, its subsidiaries or its affiliates within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

76

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15 (e) and 15d – 15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow for timely decisions regarding required disclosure.

Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control over Financial Reporting; Attestation Report of the Registered Public Accounting Firm.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on our evaluation under the criteria set forth in Internal Control - Integrated Framework (2013) issued by the COSO, our management concluded our internal control over financial reporting was effective as of December 31, 2021.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2021 has been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in their report and is incorporated herein by reference.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

77

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

SiTime Corporation

Santa Clara, CA

Opinion on Internal Control over Financial Reporting

We have audited SiTime Corporation’s (the “Company’s”) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the accompanying index and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP

Santa Clara, California

February 25, 2022

78

Item 9B. Other Information.

Adoption of Inducement Plan

On February 23, 2022, the Compensation Committee of the Board of Directors of SiTime (the “Committee”) approved and adopted the SiTime Corporation 2022 Inducement Award Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity or equity-based awards in the form of non-qualified stock options, restricted stock units, and other stock-based awards. The Inducement Plan’s terms are substantially similar to the terms of SiTime’s 2019 Stock Incentive Plan, with the addition of certain terms and conditions intended to comply with the Nasdaq inducement award exception. The Inducement Plan was adopted by the Committee without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.

The Committee has reserved 250,000 shares of SiTime’s common stock for issuance pursuant to awards granted under the Inducement Plan (subject to customary adjustments in the event of a change in capital structure of SiTime). Awards under the Inducement Plan may be granted only to employees who satisfy the standards for inducement grants under Rule 5635(c)(4) of the Nasdaq Listing Rules, and only when the award is an inducement material to such individual’s entering into employment with SiTime, its subsidiaries or its affiliates within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

The foregoing description of the terms of the Inducement Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Inducement Plan, which is filed as Exhibit 10.29 to this Form 10-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

79

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item will be set forth under the captions “Election of Directors – Directors and Nominees” and “Election of Directors – Executive Officers, Directors and Director Nominees” in our definitive proxy statement to be filed with the SEC, in connection with our 2022 annual meeting of stockholders (the “Proxy Statement”), which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2021, and is incorporated in this report by reference.

Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16(a) of the Exchange Act. To the extent disclosure for delinquent reports is being made, it can be found under the section entitled “Delinquent Section 16(a) Reports” in the Proxy Statement and is incorporated herein by reference.

We have adopted a Code of Business Conduct and Ethics that applies to all of our officers and employees, including our chief executive officer, chief financial officer, corporate controller, and other employees who perform financial or accounting functions. The Code of Business Conduct and Ethics sets forth the basic principles that guide the business conduct of our employees and is available on our website at www.sitime.com. We have also adopted a Code of Ethics for Senior Financial Officers that specifically applies to our chief executive officer (our principal executive officer) and chief financial officer (our principal financial officer and principal accounting officer). Stockholders may request a free copy of our Code of Ethics for Senior Financial Officers by contacting us at SiTime Corporation, Attention: Investor Relations, 5451 Patrick Henry Drive, Santa Clara, California 95054.

To date, there have been no waivers under our Code of Business Conduct and Ethics or Code of Ethics for Senior Financial Officers. We will disclose on our website amendments to, or waivers from, our Code of Ethics for Senior Financial Officers, in accordance with applicable laws and regulations.

We have a separately designated standing audit committee of our board of directors (the “Audit Committee”) established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Raman K. Chitkara, Edward H. Frank, and Torsten G. Kreindl. All of such members meet the independence standards established by the Nasdaq listing rules for serving on an audit committee. SEC regulations require us to disclose whether a director qualifying as an “audit committee financial expert” serves on our Audit Committee. Our board of directors has determined that Messrs. Chitkara and Kreindl qualify as an “audit committee financial expert” within the meaning of such regulations. The Audit Committee financial report required by this item will be contained in our Proxy Statement under the caption “Report of the Audit Committee of the Board of Directors” and is hereby incorporated by reference.

Information regarding procedures by which stockholders may recommend nominees to our board of directors is set forth under the caption “Director Nominations” under “Corporate Governance” in the Proxy Statement.

Item 11. Executive Compensation.

The information required by this item will be set forth under the captions “Executive Compensation” and “Corporate Governance – Non-Employee Director Compensation” in the Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation – Equity Compensation Plan Information” in the Proxy Statement and is incorporated herein by reference.

80

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be set forth under the captions “Certain Relationships and Related Person Transactions” and “Corporate Governance — Director Independence” in the Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this item will be set forth under the caption “Ratification of the Appointment of Independent Registered Public Accountants — Principal Accounting Fees and Services” in the Proxy and is incorporated herein by reference.

81

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)The following documents are filed as a part of this Annual Report on Form 10-K:

1.Financial Statements:

Consolidated Balance Sheets as of December 31, 2021 and 2020	54
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2021, 2020, and 2019	55
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020, and 2019	56
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020, and 2019	57
Notes to Consolidated Financial Statements	58

2.Financial Statement Schedule (Valuation and Qualifying Accounts) for the years ended December 31, 2021, 2020, and 2019:

Schedule II—Valuation and Qualifying Accounts 87

3.Exhibits:

The documents listed below are filed (or furnished, as noted) as exhibits to this Annual Report on Form 10-K:

82

Exhibit Index

		Incorporation by Reference
Exhibit				Exhibit/Appendix			Filed
Number	Exhibit Description	Form	File Number	Reference		Filing Date	Herewith
3.1	Restated Certificate of Incorporation of SiTime Corporation	8-K	001-39135		3.1	11/26/2019
3.2	Amended and Restated Bylaws of the Company	8-K	001-39135		3.2	6/29/2021
4.1	Form of Common Stock Certificate of the Company	S-1	333-234305		4.1	10/23/2019
4.2	Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934	10-K	001-39135		4.2	2/16/2021
10.1+	Form of Indemnification Agreement between the Company and its directors and officers	10-K	001-39135		10.1	2/16/2021
10.2+	2019 Stock Incentive Plan and Forms of Stock Option Agreement, Notice of Exercise, Stock Option Grant Notice, Restricted Stock Unit Agreement, and Restricted Stock Agreement thereunder	S-1	333-234305		10.2	10/23/2019
10.3+	New Terms of Employment, dated October 21, 2014, between Rajesh Vashist and the Company	S-1	333-234305		10.3	10/23/2019
10.4+	Amendment to Terms of Employment Letter, dated June 14, 2016, between Rajesh Vashist and the Company	S-1	333-234305		10.4	10/23/2019
10.5+	Offer of Employment, dated September 24, 2019, between Arthur D. Chadwick and the Company	S-1	333-234305		10.5	10/23/2019
10.6+	Offer of Employment, dated January 27, 2018, between Lionel Bonnot and the Company	S-1	333-234305		10.6	10/23/2019
10.7+	New Terms of Employment, dated October 20, 2014, between Piyush B. Sevalia and the Company	S-1	333-234305		10.7	10/23/2019

83

10.8+	Change of Control and Severance Agreement, between the Company and Rajesh Vashist	S-1	333-234305		10.8	10/23/2019
10.9+	Form of Change of Control and Severance Agreement, between the Company and its Executives	S-1	333-234305		10.9	10/23/2019
10.12	Integration and Purchase Agreement, dated March 15, 2019, between the Company and MegaChips Corporation	S-1	333-234305	10.16		10/23/2019
10.13	Lease, dated April 15, 2016, between the Company and Batton Associates, LLC	S-1	333-234305	10.17		10/23/2019
10.14*	License Agreement, dated August 1, 2018, between the Company and Robert Bosch LLC	S-1	333-234305	10.18		10/23/2019
10.15*	Amended and Restated Manufacturing Agreement, dated February 23, 2017, between the Company and Robert Bosch LLC	S-1	333-234305	10.19		10/23/2019
10.16*	Amendment No. 1 to Amended and Restated Manufacturing Agreement, dated August 1, 2018, between the Company and Robert Bosch LLC	S-1	333-234305		10.20	10/23/2019
10.18*	Asset purchase agreement dated February 20, 2020, by and among MegaChips Taiwan Corporation and SiTime Corporation	10-Q	001-39135	10.2		5/7/2020
10.19+	Offer of Employment, dated June 5, 2020, between Vincent P. Pangrazio and SiTime Corporation	8-K	001-39135	10.1		6/9/2020
10.20+	Executive Bonus and Retention Plan	10-Q	001-39135	10.2		8/6/2020
10.21*	Asset Purchase Agreement dated August 4, 2020, by and among MegaChips Corporation and SiTime Corporation	10-Q	001-39135	10.3		8/6/2020

84

10.22+	Offer of Employment dated November 16, 2020, between Fari Assaderaghi and SiTime Corporation	10-K	001-39135	10.22	2/16/2021
10.23+	Independent Director Compensation Policy	10-K	001-39135	10.23	2/16/2021
10.24+	Letter Agreement dated April 1, 2021 between Christine Heckart and SiTime Corporation	8-K	001-39135	10.1	4/5/2021
10.25+	Consulting Agreement, dated May 15, 2021, between Akira Takata and SiTime Corporation	10-Q	001-39135	10.2	8/5/2021
10.26+	Amendment No. 1 to Consulting Agreement, dated December 30, 2021, between Akira Takata and SiTime Corporation					X
10.27	First Amendment to Lease, dated January 7, 2021, between Batton Associates, LLC and SiTime Corporation	10-Q	001-39135	10.1	11/4/2021
10.28+	Letter Agreement, dated October 18, 2021, between Rajesh Vashist and SiTime Corporation					X
10.29+	SiTime Corporation 2022 Inducement Award Plan and Form of Restricted Stock Unit Agreement					X
21.1	Subsidiaries of the Company					X
23.1	Consent of BDO USA, LLP, Independent Registered Public Accounting Firm					X
24.1	Power of Attorney (see signature page hereto)					X
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X

85

31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1#	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2#	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X

All references in the table above to previously filed documents or descriptions are incorporating those documents and descriptions by reference thereto.

All references to documents filed as exhibits to periodic reports are to periodic reports of SiTime Corporation, SEC File No. 001-39135.

_____________

+ Indicates a management contract or compensatory plan.

* Portions of this exhibit have been omitted in accordance with Item 601 of Regulation S-K.

# In accordance with Item 601(b)(32)(ii) of Regulation S‑K and SEC Release No. 34‑47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10‑K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the Company specifically incorporates it by reference.

Item 16. Form 10-K Summary.

None

86

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

	Valuation and Qualifying Accounts
	Balance at Beginning of Period		Additions Charged to Expenses or Other Accounts		Deductions Credited to Expenses or Other Accounts			Balance at End of Period
	(in thousands)
Allowance for credit losses
Year Ended December 31, 2021	$	50	$	—	$	—		$	50
Year Ended December 31, 2020	$	129	$	—	$	(79	)	$	50
Year Ended December 31, 2019	$	168	$	—	$	(39	)	$	129
Deferred tax valuation allowance
Year Ended December 31, 2021	$	55,951	$	13,363	$	—		$	69,314
Year Ended December 31, 2020	$	45,494	$	10,457	$	—		$	55,951
Year Ended December 31, 2019	$	45,496	$	—	$	(2	)	$	45,494

87

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SiTime Corporation
Date: February 25, 2022	By:	/s/ Arthur D. Chadwick
		Arthur D. Chadwick
		Executive Vice President, Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Rajesh Vashist and Arthur D. Chadwick, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with the full power of substitution, for him or her and in his or her name, place, or stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name	Title	Date
/s/ Rajesh Vashist	Chief Executive Officer and Director (Principal Executive Officer)	February 25, 2022
Rajesh Vashist
/s/ Arthur D. Chadwick	Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)	February 25, 2022
Arthur D. Chadwick
/s/ Raman K. Chitkara	Director	February 25, 2022
Raman K. Chitkara
/s/ Edward H. Frank	Director	February 25, 2022
Edward H. Frank
/s/ Torsten G. Kreindl	Director	February 25, 2022
Torsten G. Kreindl
/s/ Katherine E. Schuelke	Director	February 25, 2022
Katherine E. Schuelke
/s/ Akira Takata	Director	February 25, 2022
Akira Takata
/s/ Christine Heckart	Director	February 25, 2022
Christine Heckart
/s/ Tom D. Yiu	Director	February 25, 2022
Tom D. Yiu

88

EX-10.26

Exhibit 10.26

SITIME CORPORATION

AMENDMENT NO. 1 TO CONSULTING AGREEMENT

THIS AMENDMENT NO. 1 TO CONSULTING AGREEMENT(“Amendment”) is entered into as of December 30, 2021 (the “Effective Date”) by and between Akira Takata (“Consultant”) and SiTime Corporation with its principal place of business at 5441 Patrick Henry Drive, Santa Clara 95054, USA (“Company”).

RECITALS

WHEREAS, Company and Consultant previously entered into a Consulting Agreement dated May 15, 2021 (the “Agreement”);

WHEREAS, the parties desire to amend the Agreement as set forth below.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

AGREEMENT

1.Section 10.1 is hereby amended and restated as follows:

“10.1 Term. The initial term of this Agreement is until December 31, 2022, unless earlier terminated as provided in this Agreement.”

2.Project Assignment #1 Under Consulting Agreement, which is Exhibit A to the Agreement, is hereby amended and restated as set forth in Exhibit A attached hereto.

3.Unless otherwise amended in this Amendment, the original terms and conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duty authorized representatives.

SiTime Corporation

/s/ Lionel Bonnot

By: Lionel Bonnot

Title: EVP Sales & BD

Akira Takata

/s/ Akira Takata

Signature

EXHIBIT A

Amended and Restated Project Assignment #1 Under Consulting Agreement

Project:

Consultant will render the following services to Client as Client may from time to time request:

- Assistance with sales organization and recruiting in Japan;

- Assistance with introductions to key distributor management teams; and

- Make introductions to Tier 1 Japanese customers.

Fees And Reimbursement:

Cash Fee: $5,000 per month(pro rata for any partial month).

Equity Fee: Subject to approval by Client’s Board of Directors or a Committee thereof, the Client anticipates granting Consultant a restricted stock unit award for 500 shares of the Client’s common stock (the “First Award”). The anticipated First Award will be governed by the terms and conditions of the Client’s 2019 Stock Incentive Plan (the “Plan”) and Consultant’s grant agreement, and vest on the November 20, 2021, subject to Consultant’s Continuous Service (as defined in the Plan) as of such date. Subject to approval by Client’s Board of Directors or a Committee thereof, the Client anticipates granting Consultant an additional restricted stock unit award for 300 shares of the Client’s common stock (the

“Second Award”). The anticipated Second Award will be governed by the terms and conditions of the Plan and Consultant’s grant agreement, and vest on the November 20, 2022, subject to Consultant’s Continuous Service (as defined in the Plan) as of such date.

Consultant will be reimbursed for third party expenses (at cost) if approved in writing in advance by Client. Consultant will invoice Client monthly for services and expenses and will provide such reasonable receipts or other documentation of expenses as Client might request, including copies of time records. Payment terms: Client will be invoiced on the first day of each month for services rendered and expenses incurred during the previous month.

EX-10.28

Exhibit 10.28

Rajesh Vashist

October 18, 2021

RE: Temporary assignment to SiTime Netherlands, B.V.

Dear Rajesh Vashist,

In connection with your temporary assignment to SiTime Netherlands, B.V., in Delft, the Netherlands, SiTime Corporation would hereby like to confirm the terms and conditions of your temporary assignment.

1.Confirmation of employment and duration of assignment

You have been employed on a fulltime basis by SiTime Corporation since September 2007, most recently in the position of Chief Executive Officer. Subject to your ability to reside and work in the Netherlands (i.e., you are in possession of the necessary residence and work permit), you will be temporarily transferred to SiTime Netherlands, B.V. for a fixed term of 11 months and 29 days commencing on December 1, 2021. Your temporary assignment will therefore terminate 11 months and 29 days after commencement. Upon completion or early termination of your temporary assignment, you will return to the United States to resume your previous duties. In the event you are not physically present in the Netherlands and/or unable to produce the necessary permits on the first day of this temporary assignment, the start date of this temporary assignment will be postponed until the day after the day that you are physically present in the Netherlands and can prove that you are in possession of the necessary statutory residence and work permits.

2.Current employment agreement and applicable law

During your temporary assignment to SiTime Netherlands, B.V. in the Netherlands, you will remain employed by SiTime Corporation. Your employment agreement with SiTime Corporation, including all its terms and conditions, will remain in full force and effect, unless parties agree to different terms and conditions in this transfer letter.

In the event of a conflict between your employment agreement and this temporary assignment letter, the provisions of this temporary assignment letter will take precedence, albeit only during the period of the temporary assignment.

Your employment with SiTime Corporation, including your temporary assignment, will continue to be governed by, construed under, and enforced in accordance with the laws of California.

3.Function and working hours

During your temporary assignment, you will work full time (40 hours per week) in Delft, the Netherlands, as Chief Executive Officer of SiTime Corporation. You will report to the Board of Directors of SiTime Corporation.

Your current job description will remain unchanged.

4.Employment benefits during temporary assignment

During your temporary assignment you are entitled to the following benefits:

a.Fixed gross salary:

During your temporary assignment to SiTime Netherlands, B.V., you will continue to receive your current gross salary in the amount of USO $58,875 monthly paid from U.S. payroll. Your Euro reference salary is EUR €41,000 monthly less any US tax obligations.

This salary is inclusive of the statutory 8% vacation allowance. Your vacation allowance will be paid out simultaneously with your monthly salary. If and insofar as you can receive free compensation of extraterritorial expenses pursuant to article10ea of the Wage and Salaries Tax (Implementation) Decree 1965 (Uitvoeringsbesluit

loonbelasting 1965), we agree that your gross salary is including the extraterritorial expenses.

b.Variable compensation

Your eligibility to earn a bonus as per your employment agreement will remain unchanged. Any bonus paid out includes the statutory 8%vacation allowance.

c.Benefits

In connection with your temporary assignment, you will be provided with the following:

Pre-Departure and Relocation

Tax Consultant. Grant Thornton, will be available to meet with you for an initial review of the tax policies and practices of SiTime Corporation, both in the United States (the "Home Country") and in the Netherlands (the "Host Country"). These tax consultations also provide you with an opportunity to understand the tax issues related to the temporary assignment. We will advise the tax consultant to hold your personal information in strict confidence. You will be responsible for completing and filing all required Home Country and Host Country tax returns. Grant Thornton will be made available to review and advise on your Home Country and Host Country tax returns.

On Assignment

Tax Equalization. SiTime Corporation operates a 'tax equalization' policy to treat you as fairly and equitably as possible from a tax perspective to ensure that your tax burden on your stay-at-home employment income while on your international assignment will be approximately the same as the tax that would have been incurred had you remained in the Home Country. This tax equalization is designed and intended to yield neither an economic benefit nor detriment to you, as an employee on an international assignment. This is achieved by deducting "hypothetical tax" in addition to certain actual taxes from your pay and SiTime Corporation paying your actual income tax and social taxes on your employment income. The designated tax service consultant will explain tax equalization in more detail during your tax consultations.

Notwithstanding anything in this Agreement to the contrary, any payments made to you in connection with the foregoing tax equalization shall be made no later than the end of your second taxable year beginning after the taxable year in which your U.S. Federal income tax return is required to be filed (including any extensions} for the year to which the compensation subject to such tax equalization payment relates, or, if later, your second taxable year beginning after the latest such taxable year in which your foreign tax return or payment is required to be filed or made for the year to which the compensation subject to the tax equalization payment relates.

The tax equalization described in this subsection (a} and in SiTime Corporation's tax equalization policy document and all of your obligations thereunder shall survive the termination of this agreement and your temporary assignment.

•Cost of Living Allowance. During the temporary assignment, you will be eligible to receive a Cost of Living Allowance, in the net amount of $44,000 USD per year ($3,666 per month}, payable in the Home Country, in equal bi­ weekly

instalments in accordance with SiTime Corporation's regular payroll policies. This allowance is intended to assist you to pay for general expenses related to goods and services. SiTime Corporation may, at its sole discretion, review and adjust this Cost of Living Allowance in the event of significant foreign exchange rate fluctuations. SiTime Corporation will determine in its sole discretion if and to what extent this allowance will be renewed after the first year of the temporary assignment.

•Car Lease: During the temporary assignment, you will be eligible to receive a car allowance in the net amount of $10,000 USD per year ($833 per month), payable in the Home Country, in substantially equal bi-weekly instalments in accordance with SiTime Corporation's regular payroll policies. This allowance is intended to assist you to pay for transportation expenses.

•Housing. SiTime Corporation will enter into a lease in the Host Country for accommodation on your behalf for a period of no more than 1 year. The lease may be up to $120,000 per annum ($10,000 per month); provided, however, to the extent SiTime Corporation enters into a lease for accommodations on your behalf in the Host Country exceeding the foregoing amount, you agree to reimburse SiTime Corporation for the difference. If the amount of rent due under your lease in the Host Country is less than amount set forth above, you are not entitled to any payment or benefits in respect of the difference in value.

•Shipping and Travel Expenses. SiTime Corporation will appoint a relocation company and cover all reasonable costs relating to the relocation of you and your spouse to the Host Country and your return at the end of your temporary assignment. This includes the shipment and insurance of your personal belongings and household goods. SiTime Corporation will cover the costs of two round-trip business class flights between the Host Country and the Home Country for your spouse during your temporary assignment.

•Income Tax Preparation and Immigration Fees. SiTime Corporation will provide you SiTime Corporation designated service providers, selected at SiTime Corporation's discretion, to assist you with any required work permits, visa, and basic income tax preparation services in both the Host Country and the Home Country with respect to any tax years falling within the term of the temporary assignment or any extended term thereof, if applicable; or to the extent SiTime Corporation compensates you for services attributable to this temporary assignment outside of the term or extended term, if applicable. You are responsible to retain your own professional services for any other matters, including but not limited to services for tax liabilities or filings from investments, services for legal matters unrelated to work permit or visa, etc.

d.Vacation days and public holidays:

During the term of your temporary assignment, you will remain entitled to the number of vacation days as provided to employees in the United States. Your vacation entitlement is however subject to a minimum of 20 vacation days per vacation year (based on a 40 hour work week). In the respective vacation year in which your temporary assignment commences or terminates, your minimum vacation day entitlement will be calculated on a pro rata basis. The vacation year in the Netherlands runs from January 1 to December 31. You must strive to use any vacation accrued during your temporary assignment during the temporary assignment period.

Days which are declared national public holidays in the United States but not in the Netherlands will be considered as vacation days if you take leave during those days.

e.Healthcare insurance

SiTime Corporation will provide for adequate health care insurance during your temporary assignment, which will pay medical expenses incurred by you in the Netherlands.

f.Incapacity for work

In case of incapacity for work, you are required to immediately inform SiTime Netherlands,

B.V. thereof. If you are not present at the offices on the first day of your incapacity for work, the aforementioned information will be given to SiTime Netherlands, B.V. no later than

9.30a.m.

The rules concerning sick pay as per your current employment agreement and/or as per California law will remain applicable during your temporary assignment. Your eligibility to sick pay is however subject to the Dutch Immigration and Naturalization Service's (in Dutch IND) minimum monthly income criteria for Intra Company Transfer(ICT) employees aged 30 or above (2019: € 4.500,-, excluding 8% vacation allowance). This means that you will always remain entitled to at least the ICT minimum monthly income during sickness.

5.Social security in home country

SiTime Corporation will apply to the Social Security Administration for you to remain socially insured in the United States during your temporary assignment, provided national and/or international legislation and regulations offer the possibility thereto. SiTime Corporation will request a certificate of coverage for your benefit. You hereby grant your cooperation if and insofar as is necessary.

6.Termination and prolongation of the assignment

Notwithstanding your temporary assignment to SiTime Netherlands, B.V., both SiTime Corporation and you remain authorized to terminate the employment relationship between SiTime Corporation and yourself and the temporary assignment in accordance with the terms and conditions of your employment agreement, with or without cause or advance notice as per any day prior to the end date of this temporary assignment.

Your temporary assignment will in any case terminate at the same moment that your employment agreement terminates, irrespective of whether SiTime Corporation takes or you take the initiative to terminate your employment agreement.

Kindly sign this letter where indicated below to indicate your acknowledgement and agreement to the temporary assignment and the related terms and conditions.

We appreciate your service to SiTime Corporation and SiTime Netherlands, B.V. If you have any questions with regard to above, please do not hesitate to contact me.

Sincerely,

/s/ Vincent Pangrazio

Vincent Pangrazio

EVP, Chief Legal Officer and Secretary

SiTime Corporation

/s/ Rajesh Vashist

Signature

I accept the above terms and conditions

Rajesh Vashist

Date: October 18, 2021

EX-10.29

Exhibit 10.29

SITIME CORPORATION

2022 INDUCEMENT AWARD PLAN

(Adopted by the Compensation Committee on February 23, 2022)

(Effective on February 23, 2022)

TABLE OF CONTENTS

SECTION 1.		ESTABLISHMENT AND PURPOSE.	1
SECTION 2.		DEFINITIONS.	1
(a)	“Affiliate”		1
(b)	“Award”		1
(c)	“Award Agreement”		1
(d)	“Board of Directors” or “Board”		1
(e)	“Cash-Based Award”		1
(f)	“Change in Control”		1
(g)	“Code”		3
(h)	“Committee”		3
(i)	“Company”		3
(j)	“Consultant”		3
(k)	“Disability”		3
(l)	“Employee”		3
(m)	“Exchange Act”		3
(n)	“Exercise Price”		3
(o)	“Fair Market Value”		3
(p)	“Nonstatutory Option”		4
(q)	“Option”		4
(r)	“Outside Director”		4
(s)	“Parent”		4
(t)	“Participant”		4
(u)	“Plan”		4
(v)	“Purchase Price”		4
(w)	“Restricted Share”		4
(x)	“SAR”		4
(y)	“Section 409A”		4
(z)	“Securities Act”		4
(aa)	“Service”		4

i

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(bb)	“Share”		5
(cc)	“Stock”		5
(dd)	“Stock Unit”		5
(ee)	“Subsidiary”		5
SECTION 3.		ADMINISTRATION.	5
(a)	Committee Composition		5
(b)	Committee Procedures		5
(c)	Committee Responsibilities		5
SECTION 4.		ELIGIBILITY.	7
SECTION 5.		STOCK SUBJECT TO PLAN.	7
(a)	Basic Limitation		7
(b)	Additional Shares		7
(c)	Substitution and Assumption of Awards		7
SECTION 6.		RESTRICTED SHARES.	8
(a)	Restricted Share Award Agreement		8
(b)	Payment for Awards		8
(c)	Vesting		8
(d)	Voting and Dividend Rights		8
(e)	Restrictions on Transfer of Shares		8
SECTION 7.		TERMS AND CONDITIONS OF OPTIONS.	8
(a)	Stock Option Award Agreement		8
(b)	Number of Shares		9
(c)	Exercise Price		9
(d)	Withholding Taxes		9
(e)	Exercisability and Term		9
(f)	Exercise of Options		9
(g)	Effect of Change in Control		9
(h)	No Rights as a Stockholder		10
(i)	Modification, Extension and Renewal of Options		10

ii

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(j)	Repricing of Options		10
(k)	Restrictions on Transfer of Shares		10
(l)	Buyout Provisions		10
SECTION 8.		PAYMENT FOR SHARES.	10
(a)	General Rule		10
(b)	Surrender of Stock		10
(c)	Services To Be Rendered		11
(d)	Cashless Exercise		11
(e)	Exercise/Pledge		11
(f)	Net Exercise		11
(g)	Promissory Note		11
(h)	Other Forms of Payment		11
(i)	Limitations under Applicable Law		11
SECTION 9.		STOCK APPRECIATION RIGHTS.	11
(a)	SAR Award Agreement		11
(b)	Number of Shares		12
(c)	Exercise Price		12
(d)	Exercisability and Term		12
(e)	Effect of Change in Control		12
(f)	Exercise of SARs		12
(g)	Modification, Extension or Assumption of SARs		12
(h)	Repricing of SARs		12
(i)	Buyout Provisions		13
SECTION 10.		STOCK UNITS.	13
(a)	Stock Unit Award Agreement		13
(b)	Payment for Awards		13
(c)	Vesting Conditions		13
(d)	Voting and Dividend Rights		13
(e)	Form and Time of Settlement of Stock Units		13

iii

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(f)	Death of Participant		14
(g)	Creditors’ Rights		14
SECTION 11.		CASH-BASED AWARDS	14
SECTION 12.		ADJUSTMENT OF SHARES.	14
(a)	Adjustments		14
(b)	Dissolution or Liquidation		15
(c)	Reorganizations		15
(d)	Reservation of Rights		15
SECTION 13.		DEFERRAL OF AWARDS.	16
(a)	Committee Powers		16
(b)	General Rules		16
SECTION 14.		LEGAL AND REGULATORY REQUIREMENTS.	16
SECTION 15.		TAXES.	17
(a)	Withholding Taxes		17
(b)	Share Withholding		17
(c)	Section 409A		17
SECTION 16.		TRANSFERABILITY.	17
SECTION 17.		PERFORMANCE BASED AWARDS.	18
SECTION 18.		NO EMPLOYMENT RIGHTS.	18
SECTION 19.		DURATION AND AMENDMENTS.	18
(a)	Term of the Plan		18
(b)	Right to Amend the Plan		18
(c)	Effect of Termination		18
SECTION 20.		AWARDS TO NON-U.S. PARTICIPANTS.	18
SECTION 21.		GOVERNING LAW.	18
SECTION 22.		SUCCESSORS AND ASSIGNS.	19
SECTION 23.		EXECUTION.	19

iv

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SITIME CORPORATION

2022 INDUCEMENT AWARD PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Committee on February 23, 2022 and is effective on such date (the “Effective Date”). The Plan’s purpose is to provide an inducement material for eligible award recipients to enter into employment with the Company, a Parent, a Subsidiary or an Affiliate within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules and to enhance the Company’s ability to attract, retain and motivate such persons by providing these individuals with equity ownership and other incentive opportunities.

SECTION 2. DEFINITIONS.

(a)“Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

(b)“Award” means any award of an Option, a SAR, a Restricted Share, a Stock Unit or a Cash-Based Award under the Plan.

(c)“Award Agreement” means the agreement between the Company and the recipient of an Award which contains the terms, conditions and restrictions pertaining to such Award.

(d)“Board of Directors” or “Board” means the Board of Directors of the Company, as constituted from time to time.

(e)“Cash-Based Award” means an Award that entitles the Participant to receive a cash-denominated payment.

(f) “Change in Control” means the occurrence of any of the following events:

(i)A change in the composition of the Board of Directors occurs, as a result of which fewer than one-half of the incumbent directors are directors who either:

(a)Had been directors of the Company on the “look-back date” (as defined below) (the “original directors”); or

(b)Were elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved (the “continuing directors”);

1

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

provided, however, that for this purpose, the “original directors” and “continuing directors” shall not include any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board;

(ii)Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company;

(iii)The consummation of a merger or consolidation of the Company or a Subsidiary of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (A) the Company (or its successor) and (B) any direct or indirect parent corporation of the Company (or its successor); or

(iv)The sale, transfer or other disposition of all or substantially all of the Company’s assets.

For purposes of subsection (f)(i) above, the term “look-back date” means the later of (1) the Effective Date and (2) the date that is 24 months prior to the date of the event that may constitute a Change in Control.

For purposes of subsection (f)(ii) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act, but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock.

Any other provision of this Section 2(f) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the

2

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration statement with the United States Securities and Exchange Commission in connection with an initial or secondary public offering of securities or debt of the Company to the public.

(g)“Code”means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(h)“Committee”means the Compensation Committee as designated by the Board of Directors, which is authorized to administer the Plan, as described in Section 3 hereof.

(i) “Company”means SiTime Corporation, a Delaware corporation.

(j) “Consultant”means an individual who is a consultant or advisor and who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor (not including service as a member of the Board of Directors) or a member of the board of directors of a Parent or a Subsidiary, in each case who is not an Employee. Consultants are not eligible to receive Awards with respect to their service in such capacity.

(k)“Disability”means any permanent and total disability as defined by Section 22(e)(3) of the Code.

(l) “Employee”means any individual who is a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate.

(m)“Exchange Act”means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(n)“Exercise Price”means, in the case of an Option, the amount for which one Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price” means, in the case of a SAR, an amount, as specified in the applicable SAR Award Agreement, which is subtracted from the Fair Market Value of one Share in determining the amount payable upon exercise of such SAR.

(o)“Fair Market Value”with respect to a Share, means the market price of one Share, determined by the Committee as follows:

(i)If the Stock was traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Quote system;

3

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(ii)If the Stock was traded on any established stock exchange (such as the New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market) or national market system on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable exchange or system; or

(iii)If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons.

(p)“Nonstatutory Option” means a stock option that is not an incentive stock option described in Section 422 of the Code.

(q)“Option”means a Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

(r) “Outside Director”means a member of the Board of Directors who is not a common-law employee of, or paid consultant to, the Company, a Parent or a Subsidiary. Outside Directors are not eligible to receive Awards with respect to their service in such capacity.

(s)“Parent”means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date.

(t) “Participant”means a person who holds an Award.

(u)“Plan”means this SiTime Corporation 2022 Inducement Award Plan, as amended from time to time.

(v)“Purchase Price”means the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee.

(w)“Restricted Share”means a Share awarded under the Plan.

(x)“SAR”means a stock appreciation right granted under the Plan.

(y)“Section 409A” means Section 409A of the Code.

(z)“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

4

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(aa)“Service”means service as an Employee, Consultant or Outside Director, subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement. Service does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Company determines which leaves of absence count toward Service, and when Service terminates for all purposes under the Plan.

(bb)“Share”means one share of Stock, as adjusted in accordance with Section 12 (if applicable).

(cc)“Stock”means the Common Stock, par value $0.0001 per share, of the Company.

(dd)“Stock Unit”means a bookkeeping entry representing the Company’s obligation under the Plan to deliver one Share (or distribute cash) on a future date in accordance with the provisions of a Stock Unit Award Agreement.

(ee)“Subsidiary”means any corporation, if the Company and/or one or more other Subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

SECTION 3. ADMINISTRATION.

(a)Committee Composition. The Plan shall be administered by a Committee appointed by the Board, or by the Board acting as the Committee. The Committee shall consist of two or more directors of the Company. In addition, to the extent required by the Board, the composition of the Committee shall satisfy such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act.

(b)Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing (including via email) by all Committee members, shall be valid acts of the Committee.

(c)Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:

(i)To interpret the Plan and to apply its provisions;

(ii)To adopt, amend or rescind rules, procedures and forms relating to the Plan;

5

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(iii)To adopt, amend or terminate sub-plans established for the purpose of satisfying applicable foreign laws including qualifying for preferred tax treatment under applicable foreign tax laws;

(iv)To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(v)To determine when Awards are to be granted under the Plan;

(vi)To select the Participants to whom Awards are to be granted;

(vii)To determine the type of Award and number of Shares or amount of cash to be made subject to each Award;

(viii)To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), and to specify the provisions of the agreement relating to such Award;

(ix)To amend any outstanding Award Agreement, subject to applicable legal restrictions and listing requirements and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired;

(x)To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration;

(xi)To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage;

(xii)To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business;

(xiii)To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award Agreement;

(xiv)To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; and

(xv)To take any other actions deemed necessary or advisable for the administration of the Plan.

Notwithstanding anything in the Plan to the contrary, the grant of Awards must be approved by the Company’s independent compensation committee or a majority of the Company’s

6

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

independent directors (as defined in Rule 5605(a)(2) of the Nasdaq Listing Rules) in order to comply with the exemption from the stockholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the Nasdaq Listing Rules.

All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and all persons deriving their rights from a Participant. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan or any Award under the Plan.

SECTION 4. ELIGIBILITY.

Awards may only be granted to Employees who satisfy the standards for inducement grants under Rule 5635(c)(4) of the Nasdaq Listing Rules, where the Award is an inducement material to the individual’s entering into employment with the Company, a Parent, a Subsidiary or an Affiliate within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. For clarity, Awards may not be granted to (i) Consultants or Outside Directors, for service in such capacities, or (ii) any individual who was previously an Employee or Outside Director, other than following a bona fide period of non-employment.

SECTION 5. STOCK SUBJECT TO PLAN.

(a)Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares authorized for issuance as Awards under the Plan shall not exceed 250,000 Shares, subject to adjustment pursuant to Section 12. The number of Shares that are subject to Awards outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.

(b)Additional Shares. If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any reason before being exercised or settled, or an Award is settled in cash without the delivery of Shares to the holder, then any Shares subject to the Award shall again become available for Awards under the Plan. Only the number of Shares (if any) actually issued in settlement of Awards (and not forfeited) shall reduce the number available in Section 5(a) and the balance shall again become available for Awards under the Plan. Any Shares withheld to satisfy the grant price or Exercise Price or tax withholding obligation pursuant to any Award shall again become available for Awards under the Plan. Notwithstanding the foregoing provisions of this Section 5(b), Shares that have actually been issued shall not again become available for Awards under the Plan, except for Shares that are forfeited and do not become vested.

(c)Substitution and Assumption of Awards. The Committee may make Awards under the Plan by assumption, substitution or replacement of stock options, stock appreciation rights, stock units or similar awards granted by another entity (including a Parent or Subsidiary), if such assumption, substitution or replacement is in connection with an asset acquisition, stock

7

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

acquisition, merger, consolidation or similar transaction involving the Company (and/or its Parent or Subsidiary) and such other entity (and/or its affiliate). The terms of such assumed, substituted or replaced Awards shall be as the Committee, in its discretion, determines is appropriate, notwithstanding limitations on Awards in the Plan. Any such substitute or assumed Awards shall not count against the Share limitation set forth in Section 5(a) (nor shall Shares subject to such Awards be added to the Shares available for Awards under the Plan as provided in Section 5(b) above).

SECTION 6. RESTRICTED SHARES.

(a)Restricted Share Award Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Award Agreement between the Participant and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Award Agreements entered into under the Plan need not be identical.

(b)Payment for Awards. Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes and future services.

(c)Vesting. Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Award Agreement. A Restricted Share Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares or thereafter, that all or part of such Restricted Shares shall become vested in the event that a Change in Control occurs with respect to the Company.

(d)Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Share Award Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid.

(e)Restrictions on Transfer of Shares. Restricted Shares shall be subject to such rights of repurchase, rights of first refusal or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Share Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS.

(a)Stock Option Award Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Award Agreement between the Participant and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the

8

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Committee deems appropriate for inclusion in a Stock Option Award Agreement. The provisions of the various Stock Option Award Agreements entered into under the Plan need not be identical.

(b)Number of Shares. Each Stock Option Award Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 12.

(c)Exercise Price. Each Stock Option Award Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, Options may be granted with an Exercise Price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 409A. Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee in its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 8.

(d)Withholding Taxes. As a condition to the exercise of an Option, the Participant shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Participant shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

(e)Exercisability and Term. Each Stock Option Award Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Award Agreement shall also specify the term of the Option, which shall in no event exceed 10 years from the date of grant. A Stock Option Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee in its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire.

(f) Exercise of Options. Each Stock Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Participant’s estate or any person who has acquired such Option(s) directly from the Participant by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

9

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(g)Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Shares subject to such Option in the event that a Change in Control occurs with respect to the Company.

(h)No Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect to any Shares covered by his Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 12.

(i) Modification, Extension and Renewal of Options. Within the limitations of the Plan, applicable law and listing requirements, the Committee may modify, extend or renew outstanding Options without stockholder approval. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Participant, materially impair his or her rights or obligations under such Option.

(j) Repricing of Options. Within the limitations of the Plan, applicable law and listing requirements, the Committee may effect, at any time and from time to time, with the consent of any adversely affected Participant, (i) the reduction of the Exercise Price of any outstanding Option under the Plan or (ii) any other action that is treated as a repricing under generally accepted accounting principles, in each case without stockholder approval; provided, however, that no such reduction or action may be effected if it is determined, in the Company’s sole discretion, that such reduction or action would result in any such outstanding Option becoming subject to the requirements of Section 409A.

(k)Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

(l) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (ii) authorize a Participant to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.

SECTION 8. PAYMENT FOR SHARES.

(a)General Rule. The entire Exercise Price or Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(h) below.

(b)Surrender of Stock. To the extent that a Stock Option Award Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Shares which have already been owned by the Participant or his or her representative. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan. The Participant shall not surrender, or attest to the ownership of, Shares in

10

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes.

(c)Services To Be Rendered. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services to be rendered to the Company or a Subsidiary. If Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the Award) of the value of the services to be rendered by the Participant and the sufficiency of the consideration to meet the requirements of Section 6(b).

(d)Cashless Exercise. To the extent that a Stock Option Award Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

(e)Exercise/Pledge. To the extent that a Stock Option Award Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price.

(f) Net Exercise. To the extent that a Stock Option Award Agreement so provides, payment may be made all or in part by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate Fair Market Value that does not exceed the aggregate Exercise Price (plus tax withholdings, if applicable) and any remaining balance of the aggregate Exercise Price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by the Participant in cash or any other form of payment permitted under the Stock Option Agreement.

(g)Promissory Note. To the extent that a Stock Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note.

(h)Other Forms of Payment. To the extent that a Stock Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules.

(i) Limitations under Applicable Law. Notwithstanding anything herein or in a Stock Option Award Agreement or Restricted Share Award Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.

SECTION 9. STOCK APPRECIATION RIGHTS.

11

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(a)SAR Award Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Award Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Award Agreements entered into under the Plan need not be identical.

(b)Number of Shares. Each SAR Award Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 12.

(c)Exercise Price. Each SAR Award Agreement shall specify the Exercise Price. The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, SARs may be granted with an Exercise Price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 409A. Subject to the foregoing in this Section 9(c), the Exercise Price under any SAR shall be determined by the Committee in its sole discretion.

(d)Exercisability and Term. Each SAR Award Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Award Agreement shall also specify the term of the SAR, which shall in no event exceed 10 years from the date of grant. A SAR Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an Option at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control.

(e)Effect of Change in Control. The Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become fully exercisable as to all Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company.

(f) Exercise of SARs. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (i) Shares, (ii) cash or (iii) a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price.

(g)Modification, Extension or Assumption of SARs. Within the limitations of the Plan, applicable law and listing requirements, the Committee may modify, extend or assume outstanding SARs without stockholder approval. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair his or her rights or obligations under such SAR.

12

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(h)Repricing of SARs. Within the limitations of the Plan, applicable law and listing requirements, the Committee may effect, at any time and from time to time, with the consent of any adversely affected Participant, (i) the reduction of the Exercise Price of any outstanding SAR under the Plan or (ii) any other action that is treated as a repricing under generally accepted accounting principles, in each case without stockholder approval; provided, however, that no such reduction or action may be effected if it is determined, in the Company’s sole discretion, that such reduction or action would result in any such outstanding SAR becoming subject to the requirements of Section 409A.

(i) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents a SAR previously granted, or (ii) authorize a Participant to elect to cash out a SAR previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.

SECTION 10. STOCK UNITS.

(a)Stock Unit Award Agreement. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Award Agreement between the Participant and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Unit Award Agreements entered into under the Plan need not be identical.

(b)Payment for Awards. To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.

(c)Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Award Agreement. A Stock Unit Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability or retirement or other events. The Committee may determine, at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall become vested in the event that a Change in Control occurs with respect to the Company.

(d)Voting and Dividend Rights. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the Stock Units to which they attach.

(e)Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made in the form of (i) cash, (ii) Shares or (iii) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or

13

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. A Stock Unit Award Agreement may provide that vested Stock Units may be settled in a lump sum or in installments. A Stock Unit Award Agreement may provide that the distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date, subject to compliance with Section 409A. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 12.

(f) Death of Participant. Any Stock Unit Award that becomes payable after the Participant’s death shall be distributed to the Participant’s beneficiary or beneficiaries. Each recipient of a Stock Unit Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. If no beneficiary was designated or if no designated beneficiary survives the Participant, then any Stock Units Award that becomes payable after the Participant’s death shall be distributed to the Participant’s estate.

(g)Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Award Agreement.

SECTION 11. CASH-BASED AWARDS

The Committee may, in its sole discretion, grant Cash-Based Awards to any Participant in such number or amount and upon such terms, and subject to such conditions, as the Committee shall determine at the time of grant and specify in an applicable Award Agreement. The Committee shall determine the maximum duration of the Cash-Based Award, the amount of cash which may be payable pursuant to the Cash-Based Award, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Committee shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Committee. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in Shares, as the Committee determines.

SECTION 12. ADJUSTMENT OF SHARES.

(a)Adjustment. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make appropriate and equitable adjustments in:

14

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(i)The number of Shares available for future Awards and the limitations set forth under Section 5;

(ii)The number of Shares covered by each outstanding Award; and

(iii)The Exercise Price under each outstanding Option and SAR.

(b)Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

(c)Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Subject to compliance with Section 409A, such agreement shall provide for:

(i)The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation;

(ii)The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary;

(iii)The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards;

(iv)Immediate vesting, exercisability or settlement of outstanding Awards followed by the cancellation of such Awards upon or immediately prior to the effectiveness of such transaction; or

(v)Settlement of the intrinsic value of the outstanding Awards (whether or not then vested or exercisable) in cash or cash equivalents or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Awards or the underlying Shares) followed by the cancellation of such Awards (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment); in each case without the Participant’s consent. Any acceleration of payment of an amount that is subject to Section 409A will be delayed, if necessary, until the earliest time that such payment would be permissible under Section 409A without triggering any additional taxes applicable under Section 409A.

The Company will have no obligation to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.

15

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

(d)Reservation of Rights. Except as provided in this Section 12, a Participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. In the event of any change affecting the Shares or the Exercise Price of Shares subject to an Award, including a merger or other reorganization, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to 30 days prior to the occurrence of such event.

SECTION 13. DEFERRAL OF AWARDS.

(a)Committee Powers. Subject to compliance with Section 409A, the Committee (in its sole discretion) may permit or require a Participant to:

(i)Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books;

(ii)Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock Units; or

(iii)Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Stock Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such Shares as of the date when they otherwise would have been delivered to such Participant.

(b)General Rules. A deferred compensation account established under this Section 13 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 13.

16

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SECTION 14. LEGAL AND REGULATORY REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the United States Securities Act, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has not obtained from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan.

SECTION 15. TAXES.

(a)Withholding Taxes. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.

(b)Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the maximum legally required tax withholding.

(c)Section 409A. Each Award that provides for “nonqualified deferred compensation” within the meaning of Section 409A shall be subject to such additional rules and requirements as specified by the Committee from time to time in order to comply with Section 409A. If any amount under such an Award is payable upon a “separation from service” (within the meaning of Section 409A) to a Participant who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. In addition, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

SECTION 16. TRANSFERABILITY.

Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under the Plan, nor any interest in

17

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Shares issued under such Award), other than by will or the laws of descent and distribution. Any purported assignment, transfer or encumbrance in violation of this Section 16 shall be void and unenforceable against the Company.

SECTION 17. PERFORMANCE BASED AWARDS.

The number of Shares or other benefits granted, issued, retainable and/or vested under an Award may be made subject to the attainment of performance goals. The Committee may utilize any performance criteria selected by it in its sole discretion to establish performance goals.

SECTION 18. NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any Award granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee or Consultant. The Company and its Subsidiaries reserve the right to terminate any person’s Service at any time and for any reason, with or without notice.

SECTION 19. DURATION AND AMENDMENTS.

(a)Term of the Plan. The Plan, as set forth herein, shall come into existence on the date of its adoption by the Committee; provided, however, that no Award may be granted hereunder prior to the Effective Date. The Board of Directors may suspend or terminate the Plan at any time.

(b)Right to Amend the Plan. The Board of Directors may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An amendment of the Plan or any Award shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations, rules or listing requirements.

(c)Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan.

SECTION 20. AWARDS TO NON-U.S. PARTICIPANTS.

Awards may be granted to Participants who are non-United States nationals or employed or providing services outside the United States, or both, on such terms and conditions different from those applicable to Awards to Participants who are employed or providing services in the United States as may, in the judgment of the Committee, be necessary or desirable to recognize differences in local law, tax policy or custom. The Committee also may impose conditions on the exercise, vesting or settlement of Awards in order to minimize the Company’s obligation with respect to tax equalization for Participants on assignments outside their home country.

18

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SECTION 21. GOVERNING LAW.

The Plan and each Award Agreement shall be governed by the laws of the State of Delaware, without application of the conflicts of law principles thereof.

SECTION 22. SUCCESSORS AND ASSIGNS.

The terms of the Plan shall be binding upon and inure to the benefit of the Company and any successor entity, including any successor entity contemplated by Section 12(c).

SECTION 23. EXECUTION.

To record the adoption of the Plan by the Committee, the Company has caused its authorized officer to execute the same.

19

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SITIME CORPORATION

By: /s/ Vincent Pangrazio

Name : Vincent Pangrazio

Title: EVP, Chief Legal Officer and Corporate Secretary

20

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SITIME CORPORATION

2022 INDUCEMENT AWARD PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

You have been granted an Award of Stock Units (the “RSUs”) representing shares of common stock (“Shares”) of SiTime Corporation (the “Company”) under the SiTime Corporation 2022 Inducement Award Plan, as may be amended from time to time (the “Plan”), as detailed in this Notice of Restricted Stock Unit Award (“Notice”):

Name of Recipient:

Grant Date:

Total Number of Shares

Subject to RSUs:

Vesting Commencement Date:

Vesting Schedule:

By your written signature below (or your electronic acceptance) and the signature of the Company’s representative below, you and the Company agree that the RSUs are granted under and governed by the term and conditions of the Plan, this Notice, and the attached Restricted Stock Unit Agreement, including any Appendices thereto (collectively, the “Agreement”).

By your written signature below (or your electronic acceptance), you further agree that the Company may deliver by e-mail all documents relating to the Plan or this Award (including without limitation, prospectuses required by the U.S. Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it will notify you by e-mail. Should you electronically accept this Agreement, you agree to the following: “This electronic contract contains my electronic signature, which I have executed with the intent to sign this Agreement.”

21

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

RECIPIENT	SITIME CORPORATION
	By:
Participant’s Signature	Name:
	Title:
Participant’s Printed Name
Date Signed

22

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

SITIME CORPORATION

2022 INDUCEMENT AWARD PLAN

RESTRICTED STOCK UNIT AGREEMENT

The Plan and Other Agreements	The RSUs are granted pursuant and subject in all respects to the applicable provisions of the Notice of Restricted Stock Unit Award (the “Notice”), this Restricted Stock Unit Agreement, including the Appendices attached hereto, (collectively, the “Agreement”), and the Plan, which is incorporated herein by reference. Capitalized terms not defined in this Agreement will have the meanings ascribed to them in the Plan.
	The attached Notice, this Agreement, and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded.
Payment for RSUs	No cash payment is required for the RSUs you receive.
Vesting	The RSUs will vest as shown in the Notice. No additional RSUs vest after your Service has terminated for any reason.
Forfeiture	If your Service terminates for any reason, then any unvested RSUs will be forfeited as of the termination date. You receive no payment for RSUs that are forfeited. For purposes of this Award, the termination date will be the date on which you cease to provide active Service to Company or any Subsidiary or Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are providing Service or the terms of your service agreement, if any). Any right to vest in the RSUs will terminate as of such date and will not be extended by any notice period or any period of “garden leave” or similar period mandated under the laws in the jurisdiction where you are providing Service or the terms of your service agreement, if any; the Committee shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your RSUs (including whether you may still be considered to be providing services while on a leave of absence).

23

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Leaves of Absence	For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave of absence was approved by the Company or your Employer (as defined below), if different, in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. However, your Service will terminate when the approved leave ends, unless you immediately return to active work.
	If you go on a leave of absence, then the vesting schedule specified in the Notice may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice may be adjusted in accordance with the Company’s part- time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule1.
Nature of RSUs	Your RSUs are mere bookkeeping entries. They represent only the Company’s unfunded and unsecured promise to issue Shares on a future date. As a holder of RSUs, you have no rights other than the rights of a general creditor of the Company.
No Voting Rights or Dividends	Your RSUs carry neither voting rights nor rights to dividends. You, or your estate or heirs, have no rights as a stockholder of the Company unless and until your RSUs vest and are settled by issuing Shares. No adjustments will be made for dividends or other rights if the applicable record date occurs before your Shares are issued, except as described in the Plan.
RSUs Nontransferable	You may not sell, transfer, assign, pledge or otherwise dispose of any RSUs. For instance, you may not use your RSUs as security for a loan. If you attempt to do any of these things, your RSUs will immediately be forfeited.
1 SiTime will want to ensure it complies with applicable laws outside the U.S. regarding LOAs and part-time employees.

24

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Settlement of RSUs	Each of your RSUs will be settled when it vests; provided, however, that if the Committee requires you to pay withholding taxes through a sale of Shares, settlement of each RSU may be deferred to the first permissible trading day for the Shares, if later than the applicable vesting date.
	Under no circumstances may your RSUs be settled later than two and one-half (2-1/2) months following the calendar year in which the applicable vesting date occurs.
	For purposes of this Agreement, “permissible trading day” means a day that satisfies all of the following requirements: (1) the exchange on which the Shares are traded is open for trading on that day; (2) you are permitted to sell Shares on that day without incurring liability under Section 16(b) of the Exchange Act; (3) either (a) you are not in possession of material non-public information that would make it illegal for you to sell Shares on that day under Rule 10b-5 under the Exchange Act or (b) Rule 10b5-1 under the Exchange Act would apply to the sale; (4) you are permitted to sell Shares on that day under such written insider trading policy as may have been adopted by the Company; and (5) you are not prohibited from selling Shares on that day by a written agreement between you and the Company or a third party.
	At the time of settlement, you will receive one Share for each vested RSU; provided, however, that no fractional Shares will be issued or delivered pursuant to the Plan or this Agreement, and the Committee will determine whether cash will be paid in lieu of any fractional Share or whether such fractional Share and any rights thereto will be canceled, terminated or otherwise eliminated. In addition, the Shares are issued to you subject to the condition that the issuance of the Shares not violate any law or regulation.

25

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Withholding Taxes and Stock Withholding	Regardless of any action the Company and/or the Subsidiary or Affiliate employing you (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the award, vesting or settlement of the RSUs, the subsequent sale of Shares acquired pursuant to settlement and the receipt of any dividends; and (2) do not commit to structure the terms of the award or any aspect of the RSUs to reduce or eliminate your liability for Tax- Related Items.
	Prior to the settlement of the RSUs, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or your Employer. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax- Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or your Employer.
	Unless an alternative arrangement satisfactory to the Committee has been provided prior to the vesting date, the default method for paying withholding taxes is withholding Shares that otherwise would be issued to you when the RSUs are settled, provided that the Company only withholds Shares having a Fair Market Value equal to the amount necessary to satisfy the maximum legally required tax withholding.
	The Committee may also require the withholding of taxes from the proceeds of the sale of the Shares, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization), or any other arrangement approved by the Committee.

26

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

	The Fair Market Value of the Shares, determined as of the effective date when taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. Finally, you will pay to the Company or your Employer any amount of Tax- Related Items that the Company or your Employer may be required to withhold as a result of your participation in the Plan or your acquisition of Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section, and your rights to the Shares will be forfeited if you do not comply with such obligations on or before the date that is two and one-half (2-1/2) months following the calendar year in which the applicable vesting date for the RSUs occurs.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
No Retention Rights	Neither this Award nor this Agreement gives you the right to be employed or retained by the Company or any Subsidiary or Affiliate of the Company in any capacity. The Company and its Subsidiaries and Affiliates reserve the right to terminate your Service at any time, with or without cause.
Adjustments	The number of RSUs covered by this Award will be subject to adjustment in the event of a stock split, a stock dividend or a similar change in Shares, and in other circumstances, as set forth in the Plan. The forfeiture provisions and restrictions described above will apply to all new, substitute or additional restricted stock units or securities to which you are entitled by reason of this Award.
Successors and Assigns	Except as otherwise provided in the Plan or this Agreement, every term of this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns.

27

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Notice	Any notice required or permitted under this Agreement will be given in writing and will be deemed effectively given upon the earliest of personal delivery, receipt or the third (3rd) full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto.
Section 409A of the Code	To the extent this Agreement is subject to, and not exempt from, Section 409A of the Code, this Agreement is intended to comply with Section 409A, and its provisions will be interpreted in a manner consistent with such intent. You acknowledge and agree that changes may be made to this Agreement to avoid adverse tax consequences to you under Section 409A.
Applicable Law and Choice of Venue	This Agreement will be interpreted and enforced under the laws of the State of Delaware as to matters within the scope thereof, and as to all other matters, the internal laws of the State of California, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of any state.
	For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Award or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation will be conducted only in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
Severability	The provisions of this Agreement are severable and if any one or more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

28

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

Appendices	Notwithstanding any provisions in this Agreement, the Award shall be subject to the data privacy information and consent in Appendix A if you reside outside the United States. In addition, the Award shall be subject to any special terms and conditions for your country set forth in Appendix B. Moreover, if you relocate to one of the countries included in Appendix B, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendices A and B constitute part of this Agreement.
Waiver	You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.
No Advice Regarding Grant	The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the Shares underlying the RSUs. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
Imposition of Other Requirements	The Company reserves the right to impose other requirements on your participation in the Plan, on the RSUs and on any Shares acquired upon vesting of the RSUs, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
Electronic Delivery and Acceptance	The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

BY SIGNING THE ATTACHED NOTICE YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT, INCLUDING THE APPENDICES, AND IN THE PLAN.

29

SITIME CORPORATION 2022 INDUCEMENT AWARD PLAN

EX-21.1

Exhibit 21.1

Subsidiaries of SiTime Corporation

Subsidiary	Jurisdiction
SiTime Ukraine, LLC	Ukraine
SiTime Netherlands, B.V.	Netherlands
SiTime Japan GK SiTime France	Japan France
SiTime Malaysia SDN. BHD.	Malaysia
SiTime Taiwan Limited	Taiwan

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

SiTime Corporation

Santa Clara, California

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3ASR (No. 333-253139) and Forms S-8 (No. 333-235255, 333-236847, 333-253140, and 333-262490) of SiTime Corporation of our reports dated February 25, 2022, relating to the consolidated financial statements and financial statement schedule, and the effectiveness of SiTime Corporation’s internal control over financial reporting, which appear in this Form 10-K.

/s/ BDO USA, LLP

San Jose, California

February 25, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rajesh Vashist, certify that:

1.I have reviewed this Annual Report on Form 10-K of SiTime Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2022	By:	/s/ Rajesh Vashist
		Rajesh Vashist
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Arthur D. Chadwick, certify that:

1.I have reviewed this Annual Report on Form 10-K of SiTime Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2022	By:	/s/ Arthur D. Chadwick
		Arthur D. Chadwick
		Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SiTime Corporation (the “Company”) on Form 10-K for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 25, 2022	By:	/s/ Rajesh Vashist
		Rajesh Vashist
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SiTime Corporation (the “Company”) on Form 10-K for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 25, 2022	By:	/s/ Arthur D. Chadwick
		Arthur D. Chadwick
		Executive Vice President, Chief Financial Officer

XML

Document And Entity Information - USD ($)

12 Months Ended

Dec. 31, 2021

Feb. 17, 2022

Jun. 30, 2021

Cover [Abstract]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2021

Document Fiscal Year Focus

2021

Document Fiscal Period Focus

FY

Entity Registrant Name

SiTime Corporation

Entity Central Index Key

0001451809

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Interactive Data Current

Yes

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Entity Well-known Seasoned Issuer

Yes

Entity Public Float

$ 1,592,780,318

Entity Common Stock Shares Outstanding

20,824,740

Entity Shell Company

false

ICFR Auditor Attestation Flag

true

Entity Small Business

true

Entity Emerging Growth Company

false

Title of 12(b) Security

Common Stock, $0.0001 par value per share

Trading Symbol

SITM

Security Exchange Name

NASDAQ

Entity File Number

001-39135

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

02-0713868

Entity Address, Address Line One

5451 Patrick Henry Drive

Entity Address, City or Town

Santa Clara

Entity Address, State or Province

CA

Entity Address, Postal Zip Code

95054

City Area Code

408

Local Phone Number

328-4400

Document Annual Report

true

Document Transition Report

false

Auditor Firm ID

243

Auditor Name

BDO USA, LLP

Auditor Location

San Jose, California

Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information from the registrant’s definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed no later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2021.

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 559,461	$ 73,525
Accounts receivable, net	38,376	23,920
Related party accounts receivable		736
Inventories	23,630	12,350
Prepaid expenses and other current assets	4,476	2,649
Total current assets	625,943	113,180
Property and equipment, net	37,902	11,708
Intangible assets, net	5,977	2,069
Right-of-use assets, net	8,194	8,892
Other assets	193	162
Total assets	678,209	136,011
Current liabilities:
Accounts payable	13,103	6,182
Accrued expenses and other current liabilities	24,282	12,963
Total current liabilities	37,385	19,145
Lease liabilities	6,398	6,986
Other non-current liabilities	1,929
Total liabilities	45,712	26,131
Commitments and contingencies (Note 6)
Stockholders’ equity:
Common stock, $0.0001 par value - 200,000 shares authorized; 20,825 and 17,150 shares issued and outstanding at December 31, 2021 and December 31, 2020	2	2
Additional paid-in capital	663,614	173,274
Accumulated deficit	(31,119)	(63,396)
Total stockholders’ equity	632,497	109,880
Total liabilities and stockholders’ equity	$ 678,209	$ 136,011

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares, issued	20,825,000	17,150,000
Common stock, shares, outstanding	20,825,000	17,150,000

XML

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenue	$ 218,808	$ 116,156	$ 84,074
Cost of revenue	79,346	58,224	44,516
Gross profit	139,462	57,932	39,558
Operating expenses:
Research and development	52,104	31,652	23,795
Selling, general and administrative	54,515	34,893	20,636
Total operating expenses	106,619	66,545	44,431
Income (loss) from operations	32,843	(8,613)	(4,873)
Interest expense		(726)	(1,714)
Other expense, net	(488)	(32)	(28)
Income (loss) before income taxes	32,355	(9,371)	(6,615)
Income tax (expense) benefit	(78)	(1)	8
Net income (loss)	32,277	(9,372)	(6,607)
Net income (loss) attributable to common stockholders and comprehensive income (loss)	$ 32,277	$ (9,372)	$ (6,607)
Net income (loss) per share attributable to common stockholders, basic	$ 1.70	$ (0.58)	$ (0.63)
Net income (loss) per share attributable to common stockholders, diluted	$ 1.53	$ (0.58)	$ (0.63)
Weighted-average shares used to compute basic net income (loss) per share	19,006	16,064	10,558
Weighted-average shares used to compute diluted net income (loss) per share	21,144	16,064	10,558

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Initial Public Offering	Follow-on Public Offering	Common Stock	Common Stock Initial Public Offering	Common Stock Follow-on Public Offering	Additional Paid-in Capital	Additional Paid-in Capital Initial Public Offering	Additional Paid-in Capital Follow-on Public Offering	Accumulated Deficit
Beginning Balance at Dec. 31, 2018	$ 11,015			$ 1			$ 58,431			$ (47,417)
Beginning Balance, Shares at Dec. 31, 2018				10,000,000
Stock-based compensation expense	1,379						1,379
Net income (loss)	(6,607)									(6,607)
Issuance of common stock net of underwriting discounts and commissions and other offering costs		$ 56,353			$ 1			$ 56,352
Issuance of common stock net of underwriting discounts and commissions and other offering costs, Shares					4,945,000
Issuance of shares upon vesting of restricted stock units, net of tax withholdings, Shares				23,000
Ending Balance at Dec. 31, 2019	62,140			$ 2			116,162			(54,024)
Ending Balance, Shares at Dec. 31, 2019				14,968,000
Stock-based compensation expense	14,816						14,816
Net income (loss)	(9,372)									(9,372)
Issuance of common stock net of underwriting discounts and commissions and other offering costs			$ 45,789						$ 45,789
Issuance of common stock net of underwriting discounts and commissions and other offering costs, Shares						1,525,000
Issuance of shares upon vesting of restricted stock units, net of tax withholdings	(3,493)						(3,493)
Issuance of shares upon vesting of restricted stock units, net of tax withholdings, Shares				657,000
Ending Balance at Dec. 31, 2020	$ 109,880			$ 2			173,274			(63,396)
Ending Balance, Shares at Dec. 31, 2020	17,150,000			17,150,000
Stock-based compensation expense	$ 29,694						29,694
Net income (loss)	32,277									32,277
Issuance of common stock net of underwriting discounts and commissions and other offering costs			$ 460,646						$ 460,646
Issuance of common stock net of underwriting discounts and commissions and other offering costs, Shares						2,800,000
Issuance of shares upon vesting of restricted stock units, net of tax withholdings, Shares				875,000
Ending Balance at Dec. 31, 2021	$ 632,497			$ 2			$ 663,614			$ (31,119)
Ending Balance, Shares at Dec. 31, 2021	20,825,000			20,825,000

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ 32,277	$ (9,372)	$ (6,607)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization expense	7,926	6,402	8,273
Stock-based compensation expense	29,992	16,009	1,379
Inventory write-down	1,817	1,446	321
Impairment of internal-use software	0	959
Other	117	106	9
Changes in assets and liabilities:
Accounts receivable	14,456	6,261	(1,521)
Related party accounts receivable	736	337	363
Inventories	(13,096)	(2,070)	8,144
Prepaid expenses and other assets	(1,859)	2,951	(3,145)
Accounts payable	5,826	2,606	(1,148)
Accrued expenses and other liabilities	9,798	3,491	(1,732)
Net cash provided by operating activities	59,078	16,604	7,378
Cash flows from investing activities
Purchase of property and equipment	(30,878)	(6,098)	(1,426)
Cash paid for intangibles	(2,910)	(1,695)	(1,776)
Net cash used in investing activities	(33,788)	(7,793)	(3,202)
Cash flows from financing activities
Proceeds from public offering, net of underwriting discounts and commissions and other offering costs	460,646	45,789	56,353
Tax withholding paid on behalf of employees for net share settlement	0	(3,493)	0
Proceeds from loans from financial institutions	0	35,000	0
Principal payments on loans to financial institutions	0	(76,000)	(2,000)
Principal payments on loan to MegaChips	0	0	(3,000)
Net cash provided by financing activities	460,646	1,296	51,353
Net increase in cash and cash equivalents	485,936	10,107	55,529
Cash and cash equivalents
Beginning of period	73,525	63,418	7,889
End of period	559,461	73,525	63,418
Supplemental disclosure of cash flow information
Interest paid during the period	0	799	2,167
Income taxes paid	24	1	1
Supplemental disclosure of noncash flow information
Unpaid property and equipment	1,437	343	77
Unpaid intangibles, net	3,178	0	0
Right-of-use assets acquired under operating leases	$ 689	$ 382	$ 10,763

XML

The Company and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

The Company and Summary of Significant Accounting Policies

1. The Company and Summary of Significant Accounting Policies

SiTime Corporation (the “Company”) was incorporated in the State of Delaware in December 2003. The Company is a provider of silicon timing systems. The Company primarily supplies oscillator products that comprise a MEMS resonator and clock IC that is integrated into a package, as well as standalone resonators. The Company has also started to sample clock ICs. The Company’s products are designed to address a wide range of applications across a broad array of end markets. The Company operates a fabless business model and leverages its global network of distributors and resellers to address the broad set of end markets that it serves.

Outbreak of Coronavirus Disease 2019 (“the COVID-19 pandemic”)

On March 11, 2020, the World Health Organization characterized the outbreak of the coronavirus disease known as COVID-19 as a global pandemic and recommended containment and mitigation measures. On March 13, 2020, the United States declared a national emergency concerning the outbreak, and several states and municipalities have declared public health emergencies. To combat the spread of the COVID-19 pandemic, the United States and other foreign countries in which the Company operates have imposed measures such as quarantines and “shelter-in-place” orders that are restricting business operations and travel and requiring individuals to work from home (“WFH”), which has impacted all aspects of the Company’s business as well as those of the third-parties the Company relies upon for manufacturing, assembly, testing, shipping and other operations.

During 2021, the Company experienced a growth in demand for some of its products, however, there are a number of industry-wide supply constraints affecting the supply of analog circuits manufactured by certain foundries, and affecting outsourced semiconductor assembly and test providers, which has limited and may continue to limit the Company's ability to fully satisfy the increase in demand. If the Company cannot ship its products to its customers on time and in the quantity required as a result of this supply constraint the Company's sales could decline and the Company could lose customers. As a result of the COVID-19 pandemic the Company has also experienced some delay and disruption in the manufacture, shipment, and sales of its products. In addition, the production capabilities of the Company's suppliers have been, and will likely continue to be, impacted as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or WFH orders.

The COVID-19 pandemic has negatively impacted business activity across the globe and has impacted the Company's employees and operations. The inputs into the Company’s judgments and estimates consider the economic implications of the COVID-19 pandemic, as the Company knows them, on the Company’s critical and significant accounting estimates. The extent to which the COVID-19 pandemic may impact the Company’s business will depend on future developments, which are highly uncertain, including the future effects of the COVID-19 pandemic on its employees, customers, suppliers, results of operations, financial condition, or liquidity for 2022 and beyond. To date, the Company has experienced minimal impact from any supplier disruption resulting from COVID-19.

Reporting Calendar

The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a calendar year basis.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Initial and Follow-on Public Offerings

On November 25, 2019, the Company completed its initial public offering (“IPO”), in which it issued and sold 4,945,000 shares of its common stock including the full exercise of the underwriters’ over-allotment option to purchase an additional 645,000 shares at $13.00 per share, resulting in net proceeds of $56.4 million after deducting underwriting discounts, commissions and offering costs of $7.9 million.

On June 16, 2020, the Company completed a follow-on public offering (“June 2020 Offering”), in which it issued and sold 1,525,000 shares of its common stock, resulting in net proceeds to the Company of $45.8 million after deducting underwriting discounts and commissions of $2.7 million and deferred offering costs of $0.3 million.

On February 22, 2021, the Company completed an additional follow-on public offering, in which we issued and sold 1,500,000 shares of its common stock, resulting in net proceeds to the Company of $181.6 million after deducting underwriting discounts and commissions of $8.6 million and deferred offering costs of $0.3 million.

On November 10, 2021 the Company completed a follow-on public offering, in which it issued and sold 1,300,000 shares of its common stock, resulting in net proceeds to the Company of $279.0 million after deducting underwriting discounts and commissions of $13.2 million and deferred offering costs of $0.3 million.

Stock Split

On October 16, 2019, a pricing committee of the Company’s board of directors approved an amendment and restatement of the Company’s certificate of incorporation to (i) increase the total number of authorized shares of its common stock to 200,000,000 shares, (ii) change the par value of its common stock to $0.0001 per share, and (iii) effect a 30,000-for-1 stock split of its common stock, which was within the range previously approved by its sole stockholder. These changes became effective upon filing of the Company’s amended and restated certificate of incorporation on October 18, 2019. Subsequently, on November 6, 2019, the Company’s board of directors and sole stockholder approved an amendment and restatement of the Company’s certificate of incorporation to effect a 2-for-3 reverse stock split of its common stock, which became effective on November 6, 2019. The share and per share amounts in these consolidated financial statements and accompanying notes have been adjusted to reflect such stock split and reverse stock split.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The significant areas requiring the use of management estimates and assumptions include revenue recognition, non-recurring engineering services, estimate of reserve for excess and obsolete inventories, sales and warranty reserves, estimate of reserves for accounts receivable, internally developed software capitalization, and valuation allowances for deferred tax assets. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

Foreign Currency Remeasurement

The Company and its wholly-owned subsidiaries use the U.S. dollar as the functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are measured at historical exchange rates. Revenue and expenses are remeasured using an average exchange rate in effect for the period, except for items related to non-monetary assets and liabilities, which are measured at historical exchange rates. Gains or losses from foreign currency remeasurement and transactions are included in other expense, net. For the years ended December 31, 2021, 2020, and 2019, foreign currency remeasurement and transactions gains and losses resulting in a net charge of $0.5 million, $0.1 million and less than $0.1 million, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash balances in the Company’s bank checking and savings accounts and liquid short-term investments with original or remaining maturities of 90 days or less at the date of purchase, readily convertible to known amounts of cash.

Fair Value Measurements

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current liabilities, approximate their fair values due to their short maturities. The Company determines fair value measurements used in its consolidated financial statements based upon the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

At December 31, 2021 and 2020, cash balances in bank checking and savings accounts of $339.3 million and $18.4 million, were valued using Level 1 of the fair value hierarchy. At December 31, 2021 and December 31, 2020, highly liquid money market funds of $220.2 million and $55.1 million, respectively, were valued using Level 1, of the fair value hierarchy, quoted prices in active markets for identical assets and are included in cash equivalents.

There were no transfers between Level 1 and Level 2 categories during any of the periods presented.

Accounts Receivable and Allowances for Credit Losses

Accounts receivable are stated at amounts estimated by management to be net realizable value. An allowance for credit losses is recorded when it is probable that amounts will not be collected based on historical collection trends, age of outstanding receivables, specific customer circumstances, existing economic conditions and future forecasted information. The Company performs periodic credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. Losses have not been significant in any of the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents amount is subject to concentration of credit risk. Substantially all of the Company's cash and cash equivalents balances are in excess of Federal Deposit Insurance Corporation insurance limits with financial institutions.

The Company extends credit based on an evaluation of the customer’s financial condition and collateral is not typically required. The Company primarily sells its products through third-party distributors and resellers. For the years ended December 31, 2021, 2020, and 2019, three distributors directly accounted for 10% or more of the Company’s revenue.

The following table discloses these customers’ percentage of revenue for the respective periods:

	Year Ended December 31,
	2021	2020	2019
Customer
Pernas Electronics Co. Ltd.	24%	26%	17%
Quantek Technology Corporation	10%	18%	22%
Arrow Electronics, Inc.	14%	15%	19%

Revenue from sales to one end customer through multiple distributors accounted for 22%, 40% and 23% of consolidated revenues for the years ended December 31, 2021, 2020, and 2019, respectively. No other distributors or end customers accounted for 10% or more of the Company's consolidated revenues for the years ended December 31, 2021, 2020, and 2019.

At December 31, 2021 and 2020, three customers accounted for 10% or more of accounts receivable, as disclosed below:

	As of December 31,
	2021	2020
Customer
Pernas Electronics Co. Ltd.	16%	31%
Quantek Technology Corporation	13%	22%
Smith & Associates	11%	n/a
Arrow Electronics, Inc.	14%	18%

Inventories

Inventories are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. The Company, at least quarterly, assesses the recoverability of all inventories to determine whether adjustments are required to record inventory at the lower of cost or net realizable value. The Company reduces the value of inventory by establishing excess and obsolete inventories reserves based on management’s assessment of future demand and market conditions. Actual demand may differ from forecasted demand and such differences may have a material effect on recorded value of inventory. Inventory reserve write-downs, once established, are not released until the related inventory has been sold or scrapped. Rebates from the Company’s foundries are recorded as a reduction of inventory cost and are recognized in cost of revenue over the inventory turnover days of the Company. Most of the Company’s inventory is warehoused at its contract manufacturers.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets as follows:

Lab and manufacturing equipment	3 to 7 years
Computer equipment	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of remaining lease term or estimated useful lives of the assets

The Company capitalizes the costs of purchased mask sets that are utilized during the photolithography phase of manufacturing our products, when technological feasibility and marketability have been established. The capitalization occurs upon the completion of a detailed design, the absence of significant development uncertainties and the determination of market acceptance. Such amounts are included in property and equipment in the consolidated balance sheets and are amortized to cost of revenue over their estimated useful life of 5 to 7 years. However, if significant uncertainties exist regarding the future utility of a particular mask set, then its related costs are expensed to research and development at the time the significant uncertainties are identified.

Maintenance and repair costs are charged to expense as incurred, and expenditures that extend the useful lives of assets are capitalized. Upon retirement or sale of the property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded in operating expenses.

Intangible Assets

Intangible assets include the costs related to acquired software as well as costs related to software internally developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development. The Company develops proprietary design automation software for its MEMS-based resonators. Costs incurred during the preliminary planning and evaluation stage of the project and during post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the software are capitalized. The Company defines the configuration and coding process as the application development stage. Capitalized internal use software costs are amortized, on a straight-line basis under cost of revenue over the estimated useful life of approximately 2 to 3 years. Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of 3 to 5 years.

Leases

The Company applies the guidance in Accounting Standards Codification (“ASC”), Topic 842 to individual leases of assets. The Company recognizes a transaction as a lease when it receives substantially all of the economic benefits from and directs the use of specified property, plant and equipment.

Operating leases are included in right-of-use (“ROU”), assets, accrued expenses and other current liabilities, and lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease. The Company currently does not have any finance leases.

The Company has elected the practical expedient within ASC Topic 842 to not separate lease and non-lease components within lease transactions for all classes of assets. Additionally, the Company has elected the short-term lease exception for all classes of assets and does not apply the recognition requirements for leases of 12 months or less and recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure ROU assets and lease liabilities. The incremental borrowing rate used by the Company was based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

The Company determined that no events or changes in circumstances indicate that impairment of its long-lived assets has occurred.

Warranty

The Company provides limited lifetime warranty coverage on all of its products by guaranteeing that all timing components from the Company will be free from defects in workmanship and materials and will conform to specifications for the life of the system. This assurance-type warranty is not considered a separate performance obligation, and thus no transaction price is allocated to it. The Company records the warranty costs in cost of revenue in the consolidated statements of operations and comprehensive income (loss). The warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within accrued expenses and other current liabilities and other non-current liabilities on the consolidated balance sheets based on the expected timing of the related payments. To date, the Company has had negligible returns of any defective products, and hence the warranty reserve balances as of December 31, 2021 and 2020 were less than $0.1 million.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts in the consolidated financial statements of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards, using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is provided in order to reduce the deferred tax assets to a level which, more likely than not, will be realized.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and The Coronavirus Aid, Relief, and Economic Security (“CARES Act”) , make broad and complex changes to the U.S. tax code. These computations require significant judgments and estimates to be made regarding the interpretation of the provisions within the Tax Act along with the preparation and analysis of information not previously required.

While the Company believes it has adequately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes and the effective tax rate in the period in which such determination is made.

The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority. Liabilities are established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements. The Company reports interest and penalties related to uncertain tax positions, if any, in the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall provision for income taxes in the period that such determination is made.

Revenue Recognition

The Company derives revenue from its product sales to distributors and resellers, who in turn sell to original equipment manufacturers or other end customers. The Company recognizes product revenue, at a point in time, upon shipment when it satisfies its performance obligations as evidenced by the transfer of control of its products to customers. The Company measures revenue based on the amount of consideration it expects to be entitled to in exchange for products. Variable consideration is estimated and reflected as an adjustment to the transaction price. The Company determines variable consideration, which consists primarily of price adjustments and product returns by estimating the amount of consideration the Company expects to receive from its customers based on historical experience of price adjustments and product returns. Initial estimates of price adjustments and product returns are updated at the end of each reporting period if additional information becomes available. Changes to the Company’s estimated variable consideration were not material for the periods presented. Since the Company’s performance obligations relate to contracts with a duration of less than one year, it does not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

The Company’s payment terms vary by contract type and type of customer and generally range from 30 to 60 days from shipment. The Company has also elected to recognize the cost for freight and shipping when control over the products sold passes to customers and revenue is recognized.

As a practical expedient, the Company records the incremental costs of obtaining a contract, consisting primarily of sales commissions, when incurred because the amortization period is one year or less. These costs are recorded within sales and marketing expenses. The Company entered into a distribution agreement with MegaChips, whereby the Company appointed MegaChips as the exclusive distributor of its products in Japan. The Company recognizes revenue upon shipment derived from sales of products through MegaChips in the amount of expected payments from parties which purchased the products as adjusted for estimated price concessions and product returns. In connection with the Company's efforts to contract directly with distributors in Japan, the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

Cost of Revenue

Cost of revenue consists of wafers acquired from third-party foundries, assembly, packaging, and test cost of the Company’s products paid to third-party contract manufacturers, and personnel and other costs associated with the manufacturing operations of the Company. Cost of revenue also includes depreciation of production equipment, inventory write-downs, amortization of internally developed software, shipping and handling costs, and allocation of overhead and facility costs. The Company also includes credits for rebates received from foundries in cost of revenue.

Research and Development Expenses

Research and development costs consist primarily of personnel cost, material cost, and facilities related expenses, incurred in the course of planned research and development of new products. Research and development costs are expensed as incurred.

Non-recurring engineering services

The Company has certain contracts to provide non-recurring engineering (NRE) services for research and development arrangements through 2023, which do not meet the requirement to be accounted for under ASC 606, Revenue from Contracts with Customers. The Company recognizes the payments received under these NRE arrangements as liabilities and recognizes them as an offset to research and development expense as the company achieve the milestones of the contract. As the progress towards completion occurs, the Company uses an input method based on the ratio of costs incurred to date to total estimated costs of the project. Significant judgment is required to estimate the remaining effort to complete the project. These estimates are reassessed throughout the term of the arrangement. A liability of $5.7 million and $0.5 million was recorded as accrued expenses and other current liabilities, and other non-current liabilities, respectively, in the consolidated balance sheet as of December 31, 2021. For the year ended December 31, 2021, the Company recorded $2.4 million as a reduction of research and development expenses in the consolidated statement of operations. There were no reduction of research and development expenses recorded during the years ended December 31, 2020 and 2019.

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel costs, field application engineering support, travel costs, professional and consulting fees, accounting and audit fees, legal, advertising expenses, and allocated overhead costs. Selling, general and administrative costs are expensed as incurred. Advertising expenses were $1.5 million, $0.3 million and $0.3 million, for the years ended December 31, 2021, 2020 and 2019, respectively.

Stock-Based Compensation

The Company grants restricted stock units (“RSUs”) of its own common stock and such grants are valued at the fair market value of the Company’s stock on the date of the grant and recognizes the compensation expense using the straight-line method over the requisite service period.

The Company amortizes stock-based compensation expense for time-based awards under the straight-line attribution method over the vesting period. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. The Company amortizes stock-based compensation expense for performance-based awards using the accelerated method.

The Company recognizes forfeitures as they occur.

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. Refer to "Note 3 - Net Income (Loss) Per Share" for further discussion regarding potentially dilutive and anti-dilutive securities.

Comprehensive Income (Loss)

The Company has no components of other comprehensive income loss. Therefore, net income (loss) equals comprehensive income (loss) for all periods presented. 

XML

Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2021

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this standard on January 1, 2021 did not have any impact on the Company’s consolidated financial position, results of operations, cash flows or financial disclosures. 

XML

Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

3. Net Income (Loss) Per Share

The following table summarizes the computation of basic and diluted net income (loss) per share attributable to common stockholders of the Company:

	Year Ended December 31
	2021		2020			2019
	(in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	32,277	$	(9,372	)	$	(6,607	)
Weighted-average shares outstanding
Weighted average shares used to    compute basic net income (loss) per share		19,006		16,064			10,558
Dilutive effect of employee equity incentive plans		2,138		-			-
Weighted average shares used to    compute diluted net income (loss) per share		21,144		16,064			10,558
Net income (loss) attributable to common    stockholders per share, basic	$	1.70	$	(0.58	)	$	(0.63	)
Net income (loss) attributable to common    stockholders per share, diluted	$	1.53	$	(0.58	)	$	(0.63	)

Potential dilutive securities include dilutive common shares from share-based awards attributable to the assumed exercise of vested restricted stock units using the treasury stock method. Under the treasury stock method, potential common shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive.
 

Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share if either their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method. During the year ended December 31, 2021, 2020 and 2019 the Company had 3,955, 2,095,135 and 118,545 potential shares from share-based awards that are anti-dilutive, respectively. Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted loss per share for the years ended December 31, 2020 and 2019 due to the net losses reported in these periods.

XML

Balance Sheets Components

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Balance Sheets Components

4. Balance Sheets Components

Accounts Receivable, net

Accounts receivable, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Accounts receivable, gross	$	38,426		$	23,970
Allowance for credit losses		(50	)		(50	)
Accounts receivable, net	$	38,376		$	23,920

Inventory

Inventory consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Raw materials	$	1,841	$	435
Work in progress		16,963		10,184
Finished goods		4,826		1,731
Total inventories	$	23,630	$	12,350

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Advance to suppliers	$	—	$	853
Prepaid expenses		2,398		1,074
Other current assets		2,078		722
Total prepaid and other current assets	$	4,476	$	2,649

Property and Equipment, Net

Property and equipment, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Lab and manufacturing equipment	$	44,283		$	21,958
Computer equipment		1,977			1,121
Furniture and fixtures		433			237
Construction in progress		7,100			638
Leasehold improvements		5,211			4,134
		59,004			28,088
Accumulated depreciation		(21,102	)		(16,380	)
Total property and equipment, net	$	37,902		$	11,708

Depreciation expense related to property and equipment was $5.7 million, $3.7 million, and $3.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Intangible Assets, Net

Intangible assets, net consisted of the following:

	As of
	December 31, 2021							December 31, 2020
	(in thousands)
	Gross Assets		Accumulated Amortization			Net Assets		Gross Assets		Accumulated Amortization			Net Assets
	(in thousands)
Internal use software	$	9,434	$	(8,633	)	$	801	$	9,377	$	(8,312	)	$	1,065
Purchased intangibles		11,703		(6,527	)		5,176		5,663		(4,659	)		1,004
Intangible assets	$	21,137	$	(15,160	)	$	5,977	$	15,040	$	(12,971	)	$	2,069

Amortization expense for intangible assets was $2.2 million, $2.7 million, and $4.9 million, for the years ended December 31, 2021, 2020 and 2019, respectively. During the year ended December 31, 2021, the Company purchased and capitalized software costs of $6.0 million to support research and development efforts. During the year ended December 31, 2020, the Company recorded impairment charges of $1.0 million related to capitalized cost of software that was within the development phase and was being developed solely to meet the Company’s internal needs. The impairment charge was recorded as research and development expense in the consolidated statement of operations.

As of December 31, 2021 and 2020, the Company had $0.8 million and $0.7 million, respectively, of intangibles that were still in development stage and were not being amortized. The estimated aggregate future amortization expense for intangible assets in development stage and subject to amortization as of December 31, 2021 is summarized as below:

	As of
	December 31, 2021
	(in thousands)
2022	$	2,277
2023		2,207
2024		1,311
2025		168
2026		14
	$	5,977

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Accrued payroll and related benefits	$	7,237	$	5,362
Deferred non-recurring engineering services		5,666		-
Revenue reserves		4,517		3,063
Short term lease liability		1,336		1,264
Accrued customer rebates		784		380
Other accrued expenses		4,742		2,894
Total accrued expenses and other current liabilities	$	24,282	$	12,963

XML

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

5. Leases

The Company leases real estate property under operating leases.

The Company signed a non-cancellable operating lease agreement for its corporate headquarters in Santa Clara, California, that commenced on October 20, 2016 and will expire on December 31, 2026. In January 2021, the Company signed an amendment to its Santa Clara office space lease where the lessor provided the Company lease incentives of $0.4 million and extended the term of the lease by three months. The amendment was accounted as a single modified lease and the remaining payments were remeasured using an updated discount rate. The agreement provides for an option to renew for an additional 5 years and for monthly rent payments through the term of the lease.

The Company leases office space in Santa Clara, Michigan, Malaysia, Japan, Taiwan, the Netherlands, and Ukraine all under non-cancellable operating leases with various expiration dates through March 2027. The remaining lease terms vary from a few months to 6 years. For its leases the Company has options to extend the lease term for periods varying from one to five years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. The Company also has variable lease payments that are primarily composed of common area maintenance and utility charges.

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of December 31, 2021 and 2020:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Right-of-use assets	$	8,194		$	8,892
Lease liabilities included in accrued expenses    and other current liabilities		1,336			1,264
Lease liabilities - non-current		6,398			6,986
Total operating lease liabilities	$	7,734		$	8,250
Weighted-average remaining lease term (years)		5.0			5.9
Weighted-average discount rate		4.5	%		4.2	%

The table below presents certain information related to the lease costs for operating leases for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31
	2021		2020		2019
	(in thousands)
Operating lease cost	$	1,761	$	1,696	$	1,419
Short-term lease cost		579		356		313
Variable lease cost		599		332		494
Total lease cost	$	2,939	$	2,384	$	2,226

Cash paid for operating lease liabilities was $1.7 million, $2.3 million, and $3.9 million for the years ended December 31, 2021, 2020, and 2019 respectively. The Company sub-leased a portion of its Santa Clara facility through March 31, 2019 and received $0.1 million in sub-lease income for the year ended December 31, 2019, which was included in the short-term lease cost above.

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2021:

	(in thousands)
2022	$	1,633
2023		1,737
2024		1,698
2025		1,580
2026		1,622
2027 and beyond		416
Total minimum lease payments		8,686
Less: amount of lease payments representing    interest		(952	)
Present value of future minimum lease payments		7,734
Less: current obligations under leases		(1,336	)
Long-term lease liabilities	$	6,398

During the three months ended December 2021, the Company entered into three operating leases that commence in 2022 with 2 to 5.3 year terms, for which the Company expects to record Right-of Use Asset of approximately $3.0 million and a Lease Liability of approximately $3.0 million at the commencement of these leases.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. Commitments and Contingencies

Purchase Commitments

The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and to help ensure adequate component supply, the Company enters into agreements with the Company’s contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by the Company. A portion of the Company’s reported purchase commitments arising from these agreements consists of firm, non-cancelable purchase commitments. In certain instances, these agreements allow the Company the option to cancel, reschedule, and adjust the Company’s requirements based on its business needs prior to when production starts. However, in situations where the Company is unable to cancel, reschedule, or adjust the purchase commitment due to changing customer demand, excess inventories could result in material inventory provisions. As of December 31, 2021, the Company had commitments totaling $5.4 million primarily for design and simulation licenses which will be paid through June 2024.

Commitments for MEMS Wafer Supplier Agreement

The Company purchases MEMS wafers required for its silicon timing systems products under a multi-year manufacturing agreement with a third-party supplier. Under this agreement, the Company has agreed to minimum quantity purchase commitments and is responsible for research and development, tooling, and samples cost, in addition to wafer costs. The Company has historically met the supplier’s minimum wafer quantity requirements.

Indemnification

The Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify other parties to such agreements with respect to certain matters. Typically, these obligations arise in the context of contracts that the Company has entered into, under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants or terms and conditions related to such matters as the sale and/or delivery of its products, title to assets sold, certain intellectual property claims, defective products, specified environmental matters, and certain income taxes. Further, the Company’s obligations under these agreements may be limited in terms of time, amount, or the scope of its responsibility and in some instances, the Company may have recourse against third parties for certain payments made under these agreements. It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, the Company has had no material indemnification claims under these agreements.

Legal Matters

From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determined that such a liability for litigation and contingencies are both probable and reasonably estimable.

In March 2019, VTT Technical Research Centre of Finland, Ltd. ("VTT") filed suit in the United States District Court for the Northern District of California alleging infringement by the Company of a patent relating to specific combinations of features set forth in U.S. Patent No. 8,558,643. The complaint sought unspecified monetary damages and injunctive relief. On January 22, 2020, the Company participated in a mediation that had been ordered by the Court. The case was not resolved at the mediation. A Markman Hearing was held on May 15, 2020 relating to a number of different disputed claim terms, and on July 9, 2020 the Court issued a Markman Order relating to those disputed claim terms. Among its determinations, the Court found that one of the disputed claim terms was indefinite, as well as any claim that had this claim term in it. On July 17, 2020, the Court issued a judgment finding all claims of U.S. Patent No. 8,558,643 invalid, based upon its Markman Order. VTT filed a Notice of Appeal of the Court's judgment with the US Court of Appeals for the Federal Circuit and filed its opening brief on November 19, 2020 and the Company filed its response brief on January 28, 2021. VTT filed its reply on March 4, 2021. On June 9, 2021, a hearing was held at the CAFC and on June 10, 2021 the CAFC affirmed the Court’s judgment. The Company believes this litigation matter is now fully resolved.

XML

Debt Obligations

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt Obligations

7. Debt Obligations

Terminated Revolving Lines of Credit and Loans

The Bank of Tokyo-Mitsubishi Credit Facility

On August 31, 2015, the Company entered into a bank transaction agreement with The Bank of Tokyo Mitsubishi UFJ, Ltd. ("MUFG"). The agreement provided for a revolving line of credit with a maximum available borrowing of $20.0 million, which was increased to $50.0 million in June 2018. Between August 2015 and December 31, 2019, the Company borrowed $139.0 million in several draw-downs against the revolving line of credit with terms ranging from one month to one year and interest rate ranging between 1.01% to 4.07%.

On July 24, 2020, the Company paid $76.0 million to pay down all outstanding loans and cancel the line of credit with MUFG of which $12.0 million of loans were prepaid with a penalty of $0.1 million.

Sumitomo Mitsui Banking Corporation Credit Facility

On September 22, 2017, the Company entered into an uncommitted and revolving credit line agreement with Sumitomo Mitsui Banking Corporation (SMBC). The revolving credit line has a maximum available borrowing availability of up to $20.0 million. The Company could draw loans under the revolving credit line from time to time through September 21, 2018, as long as the principal amount at any time did not exceed $20.0 million in the aggregate. Such term was extended for an additional year through September 20, 2019 and further extended for an additional year through September 21, 2020. The Company repaid the remaining outstanding balance of $2.0 million on the SMBC revolving credit line during 2019 and closed its line of credit in September 2020.

MegaChips Loan

On September 13, 2016, the Company entered into a loan agreement with MegaChips for a revolving credit limit of up to $30.0 million (the “MegaChips Loan Agreement”). Loans under the MegaChips Loan Agreement bore interest at a rate equal to the interest rate at which MegaChips procured the funds from SMBC, plus 0.09%. The outstanding balance of $3.0 million under the revolving line with MegaChips was repaid on December 12, 2019 upon maturity. During the year ended December 31, 2020, the Company closed its revolving line of credit with MegaChips.

XML

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

The Company’s certificate of incorporation, as amended and currently in effect, authorizes the Company to issue 200,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding. The Company has never declared any dividends.

XML

Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

9. Stock-based Compensation

SiTime Corporation 2019 Stock Incentive Plan

Upon completion of its IPO in November 2019, the Company adopted the SiTime Corporation 2019 Stock Incentive Plan (the “2019 Plan”), which initially reserved approximately 3.4 million shares of the Company’s common stock. The 2019 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation (collectively, “stock awards”), and cash awards, all of which may be granted to employees (including officers), directors, and consultants or affiliates. Awards granted under the 2019 Plan vest at the rate specified by the plan administrator, for restricted stock unit awards primarily over two to five years. As of December 31, 2021, 0.4 million shares were still reserved for issuance.

Activity of RSUs, cash restricted stock unit award (“CRSU”) and performance based restricted stock unit awards ("PRSU") granted under the 2019 Plan is set forth below:

	RSU			Grant Date		CRSU			Grant Date		PRSU		Grant Date
	Number of			Fair Value		Number of			Fair Value		Number of		Fair Value
	Shares			per share		Shares			per share		Shares		per share
Balance at December 31, 2018		—			—		—			—		—		—
Granted		3,012,399			13.00		—			—		—		—
Vested		(23,077	)		13.00		—			—		—		—
Forfeited		-			—		—			—		—		—
Balance at December 31, 2019		2,989,322			13.00		—			—		—		—
Granted		682,517			53.42		11,844			48.62		—		-
Vested		(766,934	)		15.46		(11,220	)		49.37		—		-
Forfeited		(169,199	)		13.72		—			—		—		—
Balance at December 31, 2020		2,735,706			22.35		624			35.05		—		-
Granted		438,474			128.55		3,025			111.93		58,954		261.39
Vested		(874,462	)		27.94		(3,649	)		98.78		—		-
Forfeited		(72,521	)		33.34		—			—		—		—
Balance at December 31, 2021		2,227,197			40.56		—			-		58,954		261.39

The difference between the number of RSUs vested and the shares of common stock issued during the year ended December 31, 2020 is the result of RSUs withheld in satisfaction of minimum tax withholding obligations associated with the vesting. The total fair value, as of the vesting date, of awards vested during the years ended December 31, 2021, 2020 and 2019 were $161.2 million, $43.7 million and $0.3 million, respectively.

Executive Bonus and Retention Plan

On August 4, 2020, the Compensation Committee of the Company adopted and approved the Executive Bonus and Retention Plan (the “Bonus and Retention Plan”). In August 2020, the Compensation Committee approved target bonus amounts and performance goals for the second half of the fiscal year 2020 (the “2020 Goals”), in January 2021, the Compensation Committee approved target bonus amounts and performance goals for the first half of the fiscal year 2021 (the “1H2021 Goals”), and in July 2021 the Compensation Committee approved target bonus amounts and performance goals for the second half of the fiscal year 2021 (the “2H2021 Goals”). The 2020 Goals, the 1H2021 Goals and the 2H2021 Goals are based on the achievement of revenue and Non-GAAP operating profit, as well as individual performance goals. The awards for the actual payouts are granted in the quarter following the end of the performance period. The target bonuses were granted based on a fixed dollar amount to be settled in a variable amount of RSUs on the vesting date and hence the awards have been classified as liability-based awards until settled. Such expense is included in the non-cash adjustment within stock-based compensation expense on the consolidated cash flow statements.

When such awards are granted in RSUs upon achievement of goals, the Company reclassifies the liability to additional paid in capital. The liability of $1.5 million for 2H2021 Goals was recorded as accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 2021. Actual payouts for 2020 Goals ranged from 119% to 144% of target, for 1H2021 Goals ranged from 76% to 141% of target, and 2H2021 Goals ranged from 138% to 150% of target, in each case based on performance.

On December 17, 2021, the Compensation Committee of the Company approved PRSUs with performance goals for the year 2022 (the “PRSU 2022 Goals”). The PRSU 2022 Goals are based on the achievement of revenue. These grants are included in the RSU awards granted in the table above.

In the year ended December 31, 2020, the Company granted CRSUs as part of an employee bonus plan. The Company ended this program effective April 1, 2021. Generally, such units were granted quarterly and fully vested at the end of the quarter they were granted except units granted to new hires that had a one-year cliff vesting. Such awards were classified as liability-based awards.

Total stock-based compensation expense for employees recognized in the consolidated statements of operations and comprehensive income (loss) was as follows:

	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Equity based awards
Cost of revenue	$	1,654	$	613	$	36
Research and development		11,087		4,682		346
Selling, general and administrative		14,422		9,521		997
	$	27,163	$	14,816	$	1,379
Liability based awards - to be settled in equity
Cost of revenue	$	114	$	—	$	—
Research and development		492		445		-
Selling, general and administrative		2,223		748		-
		2,829		1,193		-
Total stock-based compensation - equity and liability based	$	29,992	$	16,009	$	1,379
Liability based awards - cash settled
Cost of revenue	$	102	$	264	$	—
Research and development		143		415		-
Selling, general and administrative		108		278		-
	$	353	$	957	$	—
Total stock-based compensation expense	$	30,345	$	16,966	$	1,379
Stock-based compensation expense recorded to additional paid-in capital
Equity based awards	$	27,163	$	14,816	$	1,379
Liability based awards - settled in equity		2,531		-		-
Total stock-based compensation expense recorded to additional paid-in capital	$	29,694	$	14,816	$	1,379

At December 31, 2021, there was $82.5 million and $0.6 million of unrecognized compensation costs related to RSUs granted and liability-based awards, respectively. The unrecognized compensation cost is expected to be recognized over a weighted average period of 3.24 years and 0.43 years for liability-based awards.

XML

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The components of income (loss) before income taxes were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	32,379		$	(9,645	)	$	(6,485	)
Foreign		(24	)		274			(130	)
	$	32,355		$	(9,371	)	$	(6,615	)

The components of income tax (expense) benefit were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	(12	)	$	(1	)	$	8
Foreign		(66	)		—			—
	$	(78	)	$	(1	)	$	8

The material components of the deferred tax assets and liabilities consisted of net operating loss carry-forwards and tax credit carry-forwards.

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
Deferred tax assets (liabilities):
Accrual, write-down and other	$	5,442		$	3,249		$	2,469
Depreciation and amortization		(818	)		257			76
Net operating loss and credits carry forwards		64,690			52,445			42,949
Total gross deferred tax assets (liabilities)		69,314			55,951			45,494
Valuation allowance		(69,314	)		(55,951	)		(45,494	)
Total net deferred tax assets	$	—		$	—		$	—

The net valuation allowance increased by $13.4 million for the year ended December 31, 2021.

A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate is as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
US Federal Rate		21.0	%		21.0	%		21.0	%
R&D Credits		-			-			(10.9	)
Permanent differences and others		(63.3	)		90.4			(18.3	)
Change in valuation allowance		42.3			(111.4	)		8.2
		0.0	%		0.0	%		0.0	%

The reported amount of income tax expense differs from an expected amount based on statutory rates primarily due to the Company’s valuation allowance.

As of December 31, 2021 and 2020, based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be realized. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at December 31, 2021 and 2020.

At December 31, 2021 and 2020, the Company has federal net operating loss carry-forwards of approximately $259.6 million and $201.5 million, respectively, and state net operating loss carry-forwards of approximately $64.5 million and $64.0 million, respectively. At December 31, 2021 and 2020, the Company has net operating loss carryforwards for foreign income tax purposes of approximately $2.3 million and $2.2 million, respectively. These federal, state, and foreign net operating loss carry-forwards will expire beginning in 2025, 2028, and 2028, respectively. Of the total federal net operating loss carryforward, $111.2 million will not expire as a result of the Tax Act.

At December 31, 2021 and 2020, the Company also has federal research and development tax credit carry-forwards of approximately $3.9 million and $3.9 million, respectively, and state research and development tax credit carry-forwards of approximately $3.6 million and $3.6 million, respectively. The federal tax credits begin to expire in 2025, and the California tax credits carry forward indefinitely.

Utilization of the net operating loss carry-forwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (“the Code”), and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

As of December 31, 2021 and 2020, the Company had $2.4 million and $2.4 million of total unrecognized tax benefits. The Company currently has a full valuation allowance against its net deferred tax assets which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. If the Company is able to eventually recognize these uncertain tax positions, none of the unrecognized benefit would reduce the Company’s effective tax rate due to full valuation allowance of the Company’s deferred tax assets. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2021 and 2020, the Company had immaterial amounts related to the accrual of interest and penalties.

A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows:

	December 31,
	2021			2020
	(in thousands)
Beginning balance	$	2,436		$	2,184
Increase (decrease) in balance related to tax position taken during prior periods		—			—
Increase (decrease) in balance related to tax position taken during the current period		(5	)		252
Ending balance	$	2,431		$	2,436

The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the years ended December 31, 2021 and 2020.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, local, and foreign jurisdictions, where applicable. Due to the Company’s net losses, its federal, state and local, and foreign tax returns since inception are subject to audit.

As of December 31, 2021, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are as follows:

Jurisdiction	Earliest Tax Year Subject to Examination
U.S. federal	2018
California State	2017
Michigan State	2017

XML

401 (k) Plan

12 Months Ended

Dec. 31, 2021

Compensation And Retirement Disclosure [Abstract]

401 (k) Plan

11. 401(k) Plan

The Company has a 401(k) retirement plan that qualifies as a defined contribution plan. All employees are eligible to participate on the first day of the month following their hire date with the Company. Under the defined contribution plan, employees may contribute up to the lesser of 90% of their pre-tax salaries per year or the maximum contribution allowed under the Code. The Company may make discretionary matching contributions, if deferral contributions are made by the employees. The Company’s

matching contributions for the years ended December 31, 2021, 2020, and 2019 resulted in expense of $1.0 million, $0.6 million, and $0.6 million respectively.

XML

Segment Information and Operations by Geographic Area

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information and Operations by Geographic Area

12. Segment Information and Operations by Geographic Area

The Company operates in one reportable segment related to the design, development, and sale of silicon timing systems solutions. The chief operating decision maker, for the Company is the Chief Executive Officer. The Company’s Chief Executive Officer reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a single reportable and operating segment structure.

Revenue by geographic area are presented based upon the ship-to location of the original equipment manufacturers, the contract manufacturers, or the distributors who purchased the Company’s products. For sales to the distributors, their geographic location may be different from the geographic locations of the ultimate end customers. The following table sets forth revenue by country for countries with 10% or more of the Company’s revenue during any of the periods presented:

	Year Ended
	December 31, 2021		December 31, 2020		December 31, 2019
	(in thousands)
Taiwan	$	66,390	$	55,789	$	39,060
Hong Kong		82,503		30,306		16,534
United States		14,221		8,522		5,677
Other		55,694		21,539		22,803
Total	$	218,808	$	116,156	$	84,074

The following table sets forth the Company’s total property and equipment and intangible assets attributable to operations by country as of the periods presented:

	As of
	December 31, 2021			December 31, 2020
United States		57	%		68	%
Malaysia		31	%		7	%
Taiwan		5	%		12	%
Other		7	%		13	%

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

13. Related Party Transactions

The Company entered into an agreement with MegaChips, whereby the Company appointed MegaChips as a non-exclusive sales representative of its products in Japan. The Company sold products through MegaChips to distributors, resellers, or direct customers in Japan. The Company paid MegaChips a fixed percentage of the revenue as sales commission, which is recorded as commission expense and included in sales and marketing in the consolidated statements of operations and comprehensive loss. In connection with the Company's efforts to contract directly with distributors in Japan, the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

MegaChips has been the largest stockholder of the Company and held approximately 24.0% and 43.7% of the Company’s outstanding common stock as of December 31, 2021 and December 31, 2020, respectively.

As of December 31, 2021 and 2020, the Company had accounts receivable from MegaChips of $0.0 million and $0.7 million, respectively.

During the year ended December 31, 2020, the Company entered into an asset purchase agreement with MegaChips Corporation. The Company recorded the equipment of $0.1 million on the consolidated balance sheet under “Property and equipment, net.”

During the year ended December 31, 2020 the Company entered into an equipment purchase agreement with MegaChips Taiwan Corporation, a wholly-owned subsidiary of MegaChips Corporation. The Company recorded the equipment of $0.1 million on the consolidated balance sheet under “Property and equipment, net.”

During the year ended December 31, 2020 the Company entered into a services and secondment agreement with MegaChips LSI USA Corporation, a wholly-owned subsidiary of MegaChips Corporation. The Company records the transactions as consulting expenses as part of its research and development expense on the consolidated statement of operations and comprehensive loss. The service and secondment agreement with MegaChips LSI USA Corporation was terminated on August 31, 2021.

In May 2021, the Company signed a consulting agreement with Akira Takata, a member of the Board of Directors of the Company. As a consultant, Mr. Takata provided sales consulting services through December 31, 2021, for which he received monthly cash fees of $5,000, reimbursement of expenses, and an equity award of 500 RSUs that fully vested on November 20, 2021. In December 2021, the Company signed an amendment to extend the consulting agreement with Akira Takata through December 31, 2022.

The following is a summary of significant balances, transactions and payments with the related parties and affiliates.

Components of Statement of Operations and Comprehensive Loss	Year ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Sales through distribution agreement	$	8,167	$	5,714	$	5,071
License expense		—		148		158
Commission expense		340		228		202
Interest expense		—		—		94
Affiliates
Consulting fees		254		380		—

Components of Consolidated Cash Flows	Year Ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Cash paid for principal	$	—	$	—	$	3,000
Cash paid for equipment		—		209		—
Cash paid for commissions		340		228		228
Cash paid for licenses		—		25		329
Affiliates
Cash paid for consulting fees		254		380		—

XML

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

Adoption of Inducement Plan

On February 23, 2022, the Compensation Committee of the Board of Directors of SiTime (the “Committee”) approved and adopted the SiTime Corporation 2022 Inducement Award Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity or equity-based awards in the form of non-qualified stock options, restricted stock units, and other stock-based awards. The Inducement Plan’s terms are substantially similar to the terms of SiTime’s 2019 Stock Incentive Plan, with the addition of certain terms and conditions intended to comply with the Nasdaq inducement award exception. The Inducement Plan was adopted by the Committee without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.

The Committee has reserved 250,000 shares of SiTime’s common stock for issuance pursuant to awards granted under the Inducement Plan (subject to customary adjustments in the event of a change in capital structure of SiTime). Awards under the Inducement Plan may be granted only to employees who satisfy the standards for inducement grants under Rule 5635(c)(4) of the Nasdaq Listing Rules, and only when the award is an inducement material to such individual’s entering into employment with SiTime, its subsidiaries or its affiliates within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

XML

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2021

Valuation And Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

	Valuation and Qualifying Accounts
	Balance at Beginning of Period		Additions Charged to Expenses or Other Accounts		Deductions Credited to Expenses or Other Accounts			Balance at End of Period
	(in thousands)
Allowance for credit losses
Year Ended December 31, 2021	$	50	$	—	$	—		$	50
Year Ended December 31, 2020	$	129	$	—	$	(79	)	$	50
Year Ended December 31, 2019	$	168	$	—	$	(39	)	$	129
Deferred tax valuation allowance
Year Ended December 31, 2021	$	55,951	$	13,363	$	—		$	69,314
Year Ended December 31, 2020	$	45,494	$	10,457	$	—		$	55,951
Year Ended December 31, 2019	$	45,496	$	—	$	(2	)	$	45,494

XML

The Company and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Outbreak of Coronavirus Disease 2019 (“the COVID-19 pandemic”)

Outbreak of Coronavirus Disease 2019 (“the COVID-19 pandemic”)

On March 11, 2020, the World Health Organization characterized the outbreak of the coronavirus disease known as COVID-19 as a global pandemic and recommended containment and mitigation measures. On March 13, 2020, the United States declared a national emergency concerning the outbreak, and several states and municipalities have declared public health emergencies. To combat the spread of the COVID-19 pandemic, the United States and other foreign countries in which the Company operates have imposed measures such as quarantines and “shelter-in-place” orders that are restricting business operations and travel and requiring individuals to work from home (“WFH”), which has impacted all aspects of the Company’s business as well as those of the third-parties the Company relies upon for manufacturing, assembly, testing, shipping and other operations.

During 2021, the Company experienced a growth in demand for some of its products, however, there are a number of industry-wide supply constraints affecting the supply of analog circuits manufactured by certain foundries, and affecting outsourced semiconductor assembly and test providers, which has limited and may continue to limit the Company's ability to fully satisfy the increase in demand. If the Company cannot ship its products to its customers on time and in the quantity required as a result of this supply constraint the Company's sales could decline and the Company could lose customers. As a result of the COVID-19 pandemic the Company has also experienced some delay and disruption in the manufacture, shipment, and sales of its products. In addition, the production capabilities of the Company's suppliers have been, and will likely continue to be, impacted as a result of quarantines, closures of production facilities, lack of supplies, or delays caused by restrictions on travel or WFH orders.

The COVID-19 pandemic has negatively impacted business activity across the globe and has impacted the Company's employees and operations. The inputs into the Company’s judgments and estimates consider the economic implications of the COVID-19 pandemic, as the Company knows them, on the Company’s critical and significant accounting estimates. The extent to which the COVID-19 pandemic may impact the Company’s business will depend on future developments, which are highly uncertain, including the future effects of the COVID-19 pandemic on its employees, customers, suppliers, results of operations, financial condition, or liquidity for 2022 and beyond. To date, the Company has experienced minimal impact from any supplier disruption resulting from COVID-19.

Reporting Calendar

Reporting Calendar

The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a calendar year basis.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Initial and Follow-on Public Offerings

Initial and Follow-on Public Offerings

On November 25, 2019, the Company completed its initial public offering (“IPO”), in which it issued and sold 4,945,000 shares of its common stock including the full exercise of the underwriters’ over-allotment option to purchase an additional 645,000 shares at $13.00 per share, resulting in net proceeds of $56.4 million after deducting underwriting discounts, commissions and offering costs of $7.9 million.

On June 16, 2020, the Company completed a follow-on public offering (“June 2020 Offering”), in which it issued and sold 1,525,000 shares of its common stock, resulting in net proceeds to the Company of $45.8 million after deducting underwriting discounts and commissions of $2.7 million and deferred offering costs of $0.3 million.

On February 22, 2021, the Company completed an additional follow-on public offering, in which we issued and sold 1,500,000 shares of its common stock, resulting in net proceeds to the Company of $181.6 million after deducting underwriting discounts and commissions of $8.6 million and deferred offering costs of $0.3 million.

On November 10, 2021 the Company completed a follow-on public offering, in which it issued and sold 1,300,000 shares of its common stock, resulting in net proceeds to the Company of $279.0 million after deducting underwriting discounts and commissions of $13.2 million and deferred offering costs of $0.3 million.

Stock Split

Stock Split

On October 16, 2019, a pricing committee of the Company’s board of directors approved an amendment and restatement of the Company’s certificate of incorporation to (i) increase the total number of authorized shares of its common stock to 200,000,000 shares, (ii) change the par value of its common stock to $0.0001 per share, and (iii) effect a 30,000-for-1 stock split of its common stock, which was within the range previously approved by its sole stockholder. These changes became effective upon filing of the Company’s amended and restated certificate of incorporation on October 18, 2019. Subsequently, on November 6, 2019, the Company’s board of directors and sole stockholder approved an amendment and restatement of the Company’s certificate of incorporation to effect a 2-for-3 reverse stock split of its common stock, which became effective on November 6, 2019. The share and per share amounts in these consolidated financial statements and accompanying notes have been adjusted to reflect such stock split and reverse stock split.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The significant areas requiring the use of management estimates and assumptions include revenue recognition, non-recurring engineering services, estimate of reserve for excess and obsolete inventories, sales and warranty reserves, estimate of reserves for accounts receivable, internally developed software capitalization, and valuation allowances for deferred tax assets. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

Foreign Currency Remeasurement

Foreign Currency Remeasurement

The Company and its wholly-owned subsidiaries use the U.S. dollar as the functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are measured at historical exchange rates. Revenue and expenses are remeasured using an average exchange rate in effect for the period, except for items related to non-monetary assets and liabilities, which are measured at historical exchange rates. Gains or losses from foreign currency remeasurement and transactions are included in other expense, net. For the years ended December 31, 2021, 2020, and 2019, foreign currency remeasurement and transactions gains and losses resulting in a net charge of $0.5 million, $0.1 million and less than $0.1 million, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of cash balances in the Company’s bank checking and savings accounts and liquid short-term investments with original or remaining maturities of 90 days or less at the date of purchase, readily convertible to known amounts of cash.

Fair Value Measurements

Fair Value Measurements

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current liabilities, approximate their fair values due to their short maturities. The Company determines fair value measurements used in its consolidated financial statements based upon the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2: Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

At December 31, 2021 and 2020, cash balances in bank checking and savings accounts of $339.3 million and $18.4 million, were valued using Level 1 of the fair value hierarchy. At December 31, 2021 and December 31, 2020, highly liquid money market funds of $220.2 million and $55.1 million, respectively, were valued using Level 1, of the fair value hierarchy, quoted prices in active markets for identical assets and are included in cash equivalents.

There were no transfers between Level 1 and Level 2 categories during any of the periods presented.

Accounts Receivable and Allowances for Credit Losses

Accounts Receivable and Allowances for Credit Losses

Accounts receivable are stated at amounts estimated by management to be net realizable value. An allowance for credit losses is recorded when it is probable that amounts will not be collected based on historical collection trends, age of outstanding receivables, specific customer circumstances, existing economic conditions and future forecasted information. The Company performs periodic credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. Losses have not been significant in any of the periods presented.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents amount is subject to concentration of credit risk. Substantially all of the Company's cash and cash equivalents balances are in excess of Federal Deposit Insurance Corporation insurance limits with financial institutions.

The Company extends credit based on an evaluation of the customer’s financial condition and collateral is not typically required. The Company primarily sells its products through third-party distributors and resellers. For the years ended December 31, 2021, 2020, and 2019, three distributors directly accounted for 10% or more of the Company’s revenue.

The following table discloses these customers’ percentage of revenue for the respective periods:

	Year Ended December 31,
	2021	2020	2019
Customer
Pernas Electronics Co. Ltd.	24%	26%	17%
Quantek Technology Corporation	10%	18%	22%
Arrow Electronics, Inc.	14%	15%	19%

Revenue from sales to one end customer through multiple distributors accounted for 22%, 40% and 23% of consolidated revenues for the years ended December 31, 2021, 2020, and 2019, respectively. No other distributors or end customers accounted for 10% or more of the Company's consolidated revenues for the years ended December 31, 2021, 2020, and 2019.

At December 31, 2021 and 2020, three customers accounted for 10% or more of accounts receivable, as disclosed below:

	As of December 31,
	2021	2020
Customer
Pernas Electronics Co. Ltd.	16%	31%
Quantek Technology Corporation	13%	22%
Smith & Associates	11%	n/a
Arrow Electronics, Inc.	14%	18%

Inventories

Inventories

Inventories are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. The Company, at least quarterly, assesses the recoverability of all inventories to determine whether adjustments are required to record inventory at the lower of cost or net realizable value. The Company reduces the value of inventory by establishing excess and obsolete inventories reserves based on management’s assessment of future demand and market conditions. Actual demand may differ from forecasted demand and such differences may have a material effect on recorded value of inventory. Inventory reserve write-downs, once established, are not released until the related inventory has been sold or scrapped. Rebates from the Company’s foundries are recorded as a reduction of inventory cost and are recognized in cost of revenue over the inventory turnover days of the Company. Most of the Company’s inventory is warehoused at its contract manufacturers.

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation of property and equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets as follows:

Lab and manufacturing equipment	3 to 7 years
Computer equipment	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of remaining lease term or estimated useful lives of the assets

The Company capitalizes the costs of purchased mask sets that are utilized during the photolithography phase of manufacturing our products, when technological feasibility and marketability have been established. The capitalization occurs upon the completion of a detailed design, the absence of significant development uncertainties and the determination of market acceptance. Such amounts are included in property and equipment in the consolidated balance sheets and are amortized to cost of revenue over their estimated useful life of 5 to 7 years. However, if significant uncertainties exist regarding the future utility of a particular mask set, then its related costs are expensed to research and development at the time the significant uncertainties are identified.

Maintenance and repair costs are charged to expense as incurred, and expenditures that extend the useful lives of assets are capitalized. Upon retirement or sale of the property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded in operating expenses.

Intangible Assets

Intangible Assets

Intangible assets include the costs related to acquired software as well as costs related to software internally developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development. The Company develops proprietary design automation software for its MEMS-based resonators. Costs incurred during the preliminary planning and evaluation stage of the project and during post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the software are capitalized. The Company defines the configuration and coding process as the application development stage. Capitalized internal use software costs are amortized, on a straight-line basis under cost of revenue over the estimated useful life of approximately 2 to 3 years. Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of 3 to 5 years.

Leases

Leases

The Company applies the guidance in Accounting Standards Codification (“ASC”), Topic 842 to individual leases of assets. The Company recognizes a transaction as a lease when it receives substantially all of the economic benefits from and directs the use of specified property, plant and equipment.

Operating leases are included in right-of-use (“ROU”), assets, accrued expenses and other current liabilities, and lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease. The Company currently does not have any finance leases.

The Company has elected the practical expedient within ASC Topic 842 to not separate lease and non-lease components within lease transactions for all classes of assets. Additionally, the Company has elected the short-term lease exception for all classes of assets and does not apply the recognition requirements for leases of 12 months or less and recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure ROU assets and lease liabilities. The incremental borrowing rate used by the Company was based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

The Company determined that no events or changes in circumstances indicate that impairment of its long-lived assets has occurred.

Warranty

Warranty

The Company provides limited lifetime warranty coverage on all of its products by guaranteeing that all timing components from the Company will be free from defects in workmanship and materials and will conform to specifications for the life of the system. This assurance-type warranty is not considered a separate performance obligation, and thus no transaction price is allocated to it. The Company records the warranty costs in cost of revenue in the consolidated statements of operations and comprehensive income (loss). The warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within accrued expenses and other current liabilities and other non-current liabilities on the consolidated balance sheets based on the expected timing of the related payments. To date, the Company has had negligible returns of any defective products, and hence the warranty reserve balances as of December 31, 2021 and 2020 were less than $0.1 million.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts in the consolidated financial statements of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards, using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is provided in order to reduce the deferred tax assets to a level which, more likely than not, will be realized.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and The Coronavirus Aid, Relief, and Economic Security (“CARES Act”) , make broad and complex changes to the U.S. tax code. These computations require significant judgments and estimates to be made regarding the interpretation of the provisions within the Tax Act along with the preparation and analysis of information not previously required.

While the Company believes it has adequately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes and the effective tax rate in the period in which such determination is made.

The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority. Liabilities are established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements. The Company reports interest and penalties related to uncertain tax positions, if any, in the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall provision for income taxes in the period that such determination is made.

Revenue Recognition

Revenue Recognition

The Company derives revenue from its product sales to distributors and resellers, who in turn sell to original equipment manufacturers or other end customers. The Company recognizes product revenue, at a point in time, upon shipment when it satisfies its performance obligations as evidenced by the transfer of control of its products to customers. The Company measures revenue based on the amount of consideration it expects to be entitled to in exchange for products. Variable consideration is estimated and reflected as an adjustment to the transaction price. The Company determines variable consideration, which consists primarily of price adjustments and product returns by estimating the amount of consideration the Company expects to receive from its customers based on historical experience of price adjustments and product returns. Initial estimates of price adjustments and product returns are updated at the end of each reporting period if additional information becomes available. Changes to the Company’s estimated variable consideration were not material for the periods presented. Since the Company’s performance obligations relate to contracts with a duration of less than one year, it does not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

The Company’s payment terms vary by contract type and type of customer and generally range from 30 to 60 days from shipment. The Company has also elected to recognize the cost for freight and shipping when control over the products sold passes to customers and revenue is recognized.

As a practical expedient, the Company records the incremental costs of obtaining a contract, consisting primarily of sales commissions, when incurred because the amortization period is one year or less. These costs are recorded within sales and marketing expenses. The Company entered into a distribution agreement with MegaChips, whereby the Company appointed MegaChips as the exclusive distributor of its products in Japan. The Company recognizes revenue upon shipment derived from sales of products through MegaChips in the amount of expected payments from parties which purchased the products as adjusted for estimated price concessions and product returns. In connection with the Company's efforts to contract directly with distributors in Japan, the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

Cost of Revenue

Cost of Revenue

Cost of revenue consists of wafers acquired from third-party foundries, assembly, packaging, and test cost of the Company’s products paid to third-party contract manufacturers, and personnel and other costs associated with the manufacturing operations of the Company. Cost of revenue also includes depreciation of production equipment, inventory write-downs, amortization of internally developed software, shipping and handling costs, and allocation of overhead and facility costs. The Company also includes credits for rebates received from foundries in cost of revenue.

Research and Development Expenses

Research and Development Expenses

Research and development costs consist primarily of personnel cost, material cost, and facilities related expenses, incurred in the course of planned research and development of new products. Research and development costs are expensed as incurred.

Non-recurring Engineering Services

Non-recurring engineering services

The Company has certain contracts to provide non-recurring engineering (NRE) services for research and development arrangements through 2023, which do not meet the requirement to be accounted for under ASC 606, Revenue from Contracts with Customers. The Company recognizes the payments received under these NRE arrangements as liabilities and recognizes them as an offset to research and development expense as the company achieve the milestones of the contract. As the progress towards completion occurs, the Company uses an input method based on the ratio of costs incurred to date to total estimated costs of the project. Significant judgment is required to estimate the remaining effort to complete the project. These estimates are reassessed throughout the term of the arrangement. A liability of $5.7 million and $0.5 million was recorded as accrued expenses and other current liabilities, and other non-current liabilities, respectively, in the consolidated balance sheet as of December 31, 2021. For the year ended December 31, 2021, the Company recorded $2.4 million as a reduction of research and development expenses in the consolidated statement of operations. There were no reduction of research and development expenses recorded during the years ended December 31, 2020 and 2019.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel costs, field application engineering support, travel costs, professional and consulting fees, accounting and audit fees, legal, advertising expenses, and allocated overhead costs. Selling, general and administrative costs are expensed as incurred. Advertising expenses were $1.5 million, $0.3 million and $0.3 million, for the years ended December 31, 2021, 2020 and 2019, respectively.

Stock-Based Compensation

Stock-Based Compensation

The Company grants restricted stock units (“RSUs”) of its own common stock and such grants are valued at the fair market value of the Company’s stock on the date of the grant and recognizes the compensation expense using the straight-line method over the requisite service period.

The Company amortizes stock-based compensation expense for time-based awards under the straight-line attribution method over the vesting period. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. The Company amortizes stock-based compensation expense for performance-based awards using the accelerated method.

The Company recognizes forfeitures as they occur.

Net Income (Loss) Per Share Attributable to Common Stockholders

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. Refer to "Note 3 - Net Income (Loss) Per Share" for further discussion regarding potentially dilutive and anti-dilutive securities.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

The Company has no components of other comprehensive income loss. Therefore, net income (loss) equals comprehensive income (loss) for all periods presented. 

Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance

In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this standard on January 1, 2021 did not have any impact on the Company’s consolidated financial position, results of operations, cash flows or financial disclosures. 

XML

The Company and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Schedule of Concentration of Risk, by Risk Factor

The following table discloses these customers’ percentage of revenue for the respective periods:

	Year Ended December 31,
	2021	2020	2019
Customer
Pernas Electronics Co. Ltd.	24%	26%	17%
Quantek Technology Corporation	10%	18%	22%
Arrow Electronics, Inc.	14%	15%	19%

Revenue from sales to one end customer through multiple distributors accounted for 22%, 40% and 23% of consolidated revenues for the years ended December 31, 2021, 2020, and 2019, respectively. No other distributors or end customers accounted for 10% or more of the Company's consolidated revenues for the years ended December 31, 2021, 2020, and 2019.

At December 31, 2021 and 2020, three customers accounted for 10% or more of accounts receivable, as disclosed below:

	As of December 31,
	2021	2020
Customer
Pernas Electronics Co. Ltd.	16%	31%
Quantek Technology Corporation	13%	22%
Smith & Associates	11%	n/a
Arrow Electronics, Inc.	14%	18%

Property, Plant and Equipment Estimated Useful Lives

Depreciation of property and equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets as follows:

Lab and manufacturing equipment	3 to 7 years
Computer equipment	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of remaining lease term or estimated useful lives of the assets

XML

Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net Income (Loss) per Share

The following table summarizes the computation of basic and diluted net income (loss) per share attributable to common stockholders of the Company:

	Year Ended December 31
	2021		2020			2019
	(in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	32,277	$	(9,372	)	$	(6,607	)
Weighted-average shares outstanding
Weighted average shares used to    compute basic net income (loss) per share		19,006		16,064			10,558
Dilutive effect of employee equity incentive plans		2,138		-			-
Weighted average shares used to    compute diluted net income (loss) per share		21,144		16,064			10,558
Net income (loss) attributable to common    stockholders per share, basic	$	1.70	$	(0.58	)	$	(0.63	)
Net income (loss) attributable to common    stockholders per share, diluted	$	1.53	$	(0.58	)	$	(0.63	)

XML

Balance Sheets Components (Tables)

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Schedule of Accounts Receivable, Net

Accounts receivable, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Accounts receivable, gross	$	38,426		$	23,970
Allowance for credit losses		(50	)		(50	)
Accounts receivable, net	$	38,376		$	23,920

Schedule of Inventory

Inventory consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Raw materials	$	1,841	$	435
Work in progress		16,963		10,184
Finished goods		4,826		1,731
Total inventories	$	23,630	$	12,350

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Advance to suppliers	$	—	$	853
Prepaid expenses		2,398		1,074
Other current assets		2,078		722
Total prepaid and other current assets	$	4,476	$	2,649

Schedule of Property and Equipment Net

Property and equipment, net consisted of the following:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Lab and manufacturing equipment	$	44,283		$	21,958
Computer equipment		1,977			1,121
Furniture and fixtures		433			237
Construction in progress		7,100			638
Leasehold improvements		5,211			4,134
		59,004			28,088
Accumulated depreciation		(21,102	)		(16,380	)
Total property and equipment, net	$	37,902		$	11,708

Schedule of Intangible Assets, Net

Intangible assets, net consisted of the following:

	As of
	December 31, 2021							December 31, 2020
	(in thousands)
	Gross Assets		Accumulated Amortization			Net Assets		Gross Assets		Accumulated Amortization			Net Assets
	(in thousands)
Internal use software	$	9,434	$	(8,633	)	$	801	$	9,377	$	(8,312	)	$	1,065
Purchased intangibles		11,703		(6,527	)		5,176		5,663		(4,659	)		1,004
Intangible assets	$	21,137	$	(15,160	)	$	5,977	$	15,040	$	(12,971	)	$	2,069

Schedule of Future Amortization Expense for Intangible Assets

The estimated aggregate future amortization expense for intangible assets in development stage and subject to amortization as of December 31, 2021 is summarized as below:

	As of
	December 31, 2021
	(in thousands)
2022	$	2,277
2023		2,207
2024		1,311
2025		168
2026		14
	$	5,977

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of
	December 31, 2021		December 31, 2020
	(in thousands)
Accrued payroll and related benefits	$	7,237	$	5,362
Deferred non-recurring engineering services		5,666		-
Revenue reserves		4,517		3,063
Short term lease liability		1,336		1,264
Accrued customer rebates		784		380
Other accrued expenses		4,742		2,894
Total accrued expenses and other current liabilities	$	24,282	$	12,963

XML

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Summary of Lease Related Assets and Liabilities

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of December 31, 2021 and 2020:

	As of
	December 31, 2021			December 31, 2020
	(in thousands)
Right-of-use assets	$	8,194		$	8,892
Lease liabilities included in accrued expenses    and other current liabilities		1,336			1,264
Lease liabilities - non-current		6,398			6,986
Total operating lease liabilities	$	7,734		$	8,250
Weighted-average remaining lease term (years)		5.0			5.9
Weighted-average discount rate		4.5	%		4.2	%

Summary of Lease Costs

The table below presents certain information related to the lease costs for operating leases for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31
	2021		2020		2019
	(in thousands)
Operating lease cost	$	1,761	$	1,696	$	1,419
Short-term lease cost		579		356		313
Variable lease cost		599		332		494
Total lease cost	$	2,939	$	2,384	$	2,226

Summary of Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2021:

	(in thousands)
2022	$	1,633
2023		1,737
2024		1,698
2025		1,580
2026		1,622
2027 and beyond		416
Total minimum lease payments		8,686
Less: amount of lease payments representing    interest		(952	)
Present value of future minimum lease payments		7,734
Less: current obligations under leases		(1,336	)
Long-term lease liabilities	$	6,398

XML

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Schedule of Total Stock-Based Compensation Expense

Total stock-based compensation expense for employees recognized in the consolidated statements of operations and comprehensive income (loss) was as follows:

	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Equity based awards
Cost of revenue	$	1,654	$	613	$	36
Research and development		11,087		4,682		346
Selling, general and administrative		14,422		9,521		997
	$	27,163	$	14,816	$	1,379
Liability based awards - to be settled in equity
Cost of revenue	$	114	$	—	$	—
Research and development		492		445		-
Selling, general and administrative		2,223		748		-
		2,829		1,193		-
Total stock-based compensation - equity and liability based	$	29,992	$	16,009	$	1,379
Liability based awards - cash settled
Cost of revenue	$	102	$	264	$	—
Research and development		143		415		-
Selling, general and administrative		108		278		-
	$	353	$	957	$	—
Total stock-based compensation expense	$	30,345	$	16,966	$	1,379
Stock-based compensation expense recorded to additional paid-in capital
Equity based awards	$	27,163	$	14,816	$	1,379
Liability based awards - settled in equity		2,531		-		-
Total stock-based compensation expense recorded to additional paid-in capital	$	29,694	$	14,816	$	1,379

RSU, CRSU and PRSU

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Schedule of Activity of RSUs, Cash Restricted Stock Unit Award (CRSU) and Performance Based Restricted Stock Unit Awards (PRSU) Granted

Activity of RSUs, cash restricted stock unit award (“CRSU”) and performance based restricted stock unit awards ("PRSU") granted under the 2019 Plan is set forth below:

	RSU			Grant Date		CRSU			Grant Date		PRSU		Grant Date
	Number of			Fair Value		Number of			Fair Value		Number of		Fair Value
	Shares			per share		Shares			per share		Shares		per share
Balance at December 31, 2018		—			—		—			—		—		—
Granted		3,012,399			13.00		—			—		—		—
Vested		(23,077	)		13.00		—			—		—		—
Forfeited		-			—		—			—		—		—
Balance at December 31, 2019		2,989,322			13.00		—			—		—		—
Granted		682,517			53.42		11,844			48.62		—		-
Vested		(766,934	)		15.46		(11,220	)		49.37		—		-
Forfeited		(169,199	)		13.72		—			—		—		—
Balance at December 31, 2020		2,735,706			22.35		624			35.05		—		-
Granted		438,474			128.55		3,025			111.93		58,954		261.39
Vested		(874,462	)		27.94		(3,649	)		98.78		—		-
Forfeited		(72,521	)		33.34		—			—		—		—
Balance at December 31, 2021		2,227,197			40.56		—			-		58,954		261.39

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income (Loss) Before Income Taxes

The components of income (loss) before income taxes were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	32,379		$	(9,645	)	$	(6,485	)
Foreign		(24	)		274			(130	)
	$	32,355		$	(9,371	)	$	(6,615	)

Schedule of Components of Income Tax (Expense) Benefit

The components of income tax (expense) benefit were as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
United States	$	(12	)	$	(1	)	$	8
Foreign		(66	)		—			—
	$	(78	)	$	(1	)	$	8

Schedule of Components of Deferred Tax Assets and Liabilities

The material components of the deferred tax assets and liabilities consisted of net operating loss carry-forwards and tax credit carry-forwards.

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
Deferred tax assets (liabilities):
Accrual, write-down and other	$	5,442		$	3,249		$	2,469
Depreciation and amortization		(818	)		257			76
Net operating loss and credits carry forwards		64,690			52,445			42,949
Total gross deferred tax assets (liabilities)		69,314			55,951			45,494
Valuation allowance		(69,314	)		(55,951	)		(45,494	)
Total net deferred tax assets	$	—		$	—		$	—

Schedule of Reconciliation of Effective Tax Rate

A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate is as follows:

	Years Ended December 31,
	2021			2020			2019
	(in thousands)
US Federal Rate		21.0	%		21.0	%		21.0	%
R&D Credits		-			-			(10.9	)
Permanent differences and others		(63.3	)		90.4			(18.3	)
Change in valuation allowance		42.3			(111.4	)		8.2
		0.0	%		0.0	%		0.0	%

Schedule of Reconciliation of Unrecognized Tax Benefit

A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows:

	December 31,
	2021			2020
	(in thousands)
Beginning balance	$	2,436		$	2,184
Increase (decrease) in balance related to tax position taken during prior periods		—			—
Increase (decrease) in balance related to tax position taken during the current period		(5	)		252
Ending balance	$	2,431		$	2,436

Schedule of Tax Years Examination By Major Tax Jurisdictions

As of December 31, 2021, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are as follows:

Jurisdiction	Earliest Tax Year Subject to Examination
U.S. federal	2018
California State	2017
Michigan State	2017

XML

Segment Information and Operations by Geographic Area (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Schedule of Revenue by Country

The following table sets forth revenue by country for countries with 10% or more of the Company’s revenue during any of the periods presented:

	Year Ended
	December 31, 2021		December 31, 2020		December 31, 2019
	(in thousands)
Taiwan	$	66,390	$	55,789	$	39,060
Hong Kong		82,503		30,306		16,534
United States		14,221		8,522		5,677
Other		55,694		21,539		22,803
Total	$	218,808	$	116,156	$	84,074

Schedule of Property and Equipment and Intangible Assets Attributable to Operations

The following table sets forth the Company’s total property and equipment and intangible assets attributable to operations by country as of the periods presented:

	As of
	December 31, 2021			December 31, 2020
United States		57	%		68	%
Malaysia		31	%		7	%
Taiwan		5	%		12	%
Other		7	%		13	%

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Summary of Significant Balances, Transactions and Payments with Related Parties and Affiliates

The following is a summary of significant balances, transactions and payments with the related parties and affiliates.

Components of Statement of Operations and Comprehensive Loss	Year ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Sales through distribution agreement	$	8,167	$	5,714	$	5,071
License expense		—		148		158
Commission expense		340		228		202
Interest expense		—		—		94
Affiliates
Consulting fees		254		380		—

Components of Consolidated Cash Flows	Year Ended December 31,
	2021		2020		2019
	(in thousands)
MegaChips
Cash paid for principal	$	—	$	—	$	3,000
Cash paid for equipment		—		209		—
Cash paid for commissions		340		228		228
Cash paid for licenses		—		25		329
Affiliates
Cash paid for consulting fees		254		380		—

XML

The Company and Summary of Significant Accounting Policies - Additional Information (Details)								12 Months Ended
	Nov. 10, 2021 USD ($) shares	Nov. 03, 2021	Feb. 22, 2021 USD ($) shares	Jun. 16, 2020 USD ($) shares	Nov. 25, 2019 USD ($) $ / shares shares	Nov. 06, 2019	Oct. 16, 2019 $ / shares shares	Dec. 31, 2021 USD ($) Distributor Customer $ / shares shares	Dec. 31, 2020 USD ($) Customer Distributor $ / shares shares	Dec. 31, 2019 USD ($) Customer Distributor shares
Significant Accounting Policies [Line Items]
Stock split							30,000-for-1
Common stock, shares authorized | shares							200,000,000	200,000,000	200,000,000
Common stock, par value | $ / shares							$ 0.0001	$ 0.0001	$ 0.0001
Reverse stock split						2-for-3
Foreign currency remeasurement and transactions gains and losses								$ 500,000	$ 100,000
Fair value, assets, level 1 to level 2 transfers, amount								0	0
Fair value, assets, level 2 to level 1 transfers, amount								0	0
Fair value, liabilities, level 1 to level 2 transfers, amount								0	0
Fair value, liabilities, level 2 to level 1 transfers, amount								0	0
Finance leases								$ 0
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]								Liabilities
Accrued expenses and other current liabilities								$ 24,282,000	12,963,000
Reduction of research and development expense								$ 2,400,000	0
Earnings per share, potentially dilutive securities | shares								2,138,000
Selling, General and Administrative Expenses
Significant Accounting Policies [Line Items]
Advertising expenses								$ 1,500,000	$ 300,000	$ 300,000
Non-recurring Engineering Services
Significant Accounting Policies [Line Items]
Accrued expenses and other current liabilities								5,700,000
Accrued expenses and other non current liabilities								$ 500
Revenue | Credit Concentration Risk
Significant Accounting Policies [Line Items]
Number of distributors representing more than 10% of company's revenue | Distributor								3	3	3
Accounts Receivable | Credit Concentration Risk
Significant Accounting Policies [Line Items]
Concentration risk, customer								At December 31, 2021 and 2020, three customers accounted for 10% or more of accounts receivable
Number of customers | Customer								3	3
Revenue Benchmark | Customer Concentration Risk
Significant Accounting Policies [Line Items]
Number of customers accounted for 10% or more of revenues | Customer								0	0	0
Revenue Benchmark | Customer Concentration Risk | Distributor One
Significant Accounting Policies [Line Items]
Concentration risk, percentage								22.00%	40.00%	23.00%
Revenue Benchmark | Distributor Concentration Risk
Significant Accounting Policies [Line Items]
Number of distributors accounted for 10% or more of revenues | Distributor								0	0	0
Level 1
Significant Accounting Policies [Line Items]
Cash balances in bank								$ 339,300,000	$ 18,400,000
Highly liquid money market funds								$ 220,200,000	$ 55,100,000
MegaChips
Significant Accounting Policies [Line Items]
Agreement termination date		Nov. 03, 2021
Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful life								5 years
Revenue Recognized Payment Terms								30 days
Minimum | Capitalized Internal Use Software
Significant Accounting Policies [Line Items]
Estimated useful life of intangible assets								2 years
Minimum | Purchased Intangibles with Finite Lives
Significant Accounting Policies [Line Items]
Estimated useful life of intangible assets								3 years
Minimum | Revenue | Customer Concentration Risk
Significant Accounting Policies [Line Items]
Concentration risk, percentage								10.00%	10.00%	10.00%
Minimum | Revenue | Distributor Concentration Risk
Significant Accounting Policies [Line Items]
Concentration risk, percentage								10.00%	10.00%	10.00%
Minimum | Accounts Receivable | Customer Concentration Risk
Significant Accounting Policies [Line Items]
Concentration risk, percentage								10.00%	10.00%
Maximum
Significant Accounting Policies [Line Items]
Foreign currency remeasurement and transactions gains and losses										$ 100,000
Property and equipment, estimated useful life								7 years
Warranty reserve balances								$ 100,000	$ 100,000
Revenue Recognized Payment Terms								60 days
Revenue recognized amortization period term								1 year
Maximum | Capitalized Internal Use Software
Significant Accounting Policies [Line Items]
Estimated useful life of intangible assets								3 years
Maximum | Purchased Intangibles with Finite Lives
Significant Accounting Policies [Line Items]
Estimated useful life of intangible assets								5 years
Initial Public Offering [Member]
Significant Accounting Policies [Line Items]
Issuance of common stock upon net of underwriting discounts and commissions and other offerings costs, Shares | shares					4,945,000
Shares issued price per share | $ / shares					$ 13.00
Proceeds from public offering, net of underwriting discounts and commissions					$ 56,400,000
Payments for underwriting discounts, commissions and offering costs					$ 7,900,000
Follow-on Public Offering (June 2020 Offering)
Significant Accounting Policies [Line Items]
Deferred offering costs	$ 300		$ 300,000	$ 300,000
Proceeds from public offering, net of underwriting discounts and commissions	279,000,000.0		181,600,000	45,800,000
Payments for underwriting discounts and commissions	$ 13,200,000		$ 8,600,000	$ 2,700,000
Follow-on Public Offering (June 2020 Offering) | SiTime Corporation
Significant Accounting Policies [Line Items]
Issuance of common stock upon net of underwriting discounts and commissions and other offerings costs, Shares | shares	1,300,000		1,500,000	1,525,000
Over-Allotment Option
Significant Accounting Policies [Line Items]
Issuance of common stock upon net of underwriting discounts and commissions and other offerings costs, Shares | shares					645,000
Restricted Stock Units RSU
Significant Accounting Policies [Line Items]
Number of Shares, Granted | shares								438,474	682,517	3,012,399

XML

The Company and Summary of Significant Accounting Policies - Summary of Customers Percentage Accounted For 10% or More of Revenue and Accounts Receivable (Details) - Customer Concentration Risk	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenue | Pernas Electronics Co. Ltd.
Concentration Risk [Line Items]
Concentration risk, percentage	24.00%	26.00%	17.00%
Revenue | Arrow Electronics, Inc.
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%	15.00%	19.00%
Revenue | Quantek Technology Corporation
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%	18.00%	22.00%
Accounts Receivable | Pernas Electronics Co. Ltd.
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	31.00%
Accounts Receivable | Arrow Electronics, Inc.
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%	18.00%
Accounts Receivable | Quantek Technology Corporation
Concentration Risk [Line Items]
Concentration risk, percentage	13.00%	22.00%
Accounts Receivable | Smith & Associates
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%

XML

The Company and Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	5 years
Maximum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	7 years
Lab and Manufacturing Equipment | Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	3 years
Lab and Manufacturing Equipment | Maximum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	7 years
Computer Equipment
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	3 years
Furniture and Fixtures
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	5 years
Leasehold Improvements
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	Shorter of remaining lease term or estimated useful lives of the assets

XML

Net Income (Loss) Per Share - Summary of Computation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Net income (loss) attributable to common stockholders	$ 32,277	$ (9,372)	$ (6,607)
Weighted-average shares outstanding
Weighted average shares used to compute basic net income (loss) per share	19,006	16,064	10,558
Dilutive effect of employee equity incentive plans	2,138
Weighted average shares used to compute diluted net income (loss) per share	21,144	16,064	10,558
Net income (loss) attributable to common stockholders per share, basic	$ 1.70	$ (0.58)	$ (0.63)
Net income (loss) attributable to common stockholders per share, diluted	$ 1.53	$ (0.58)	$ (0.63)

XML

Net Income (Loss) Per Share - Additional Information (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Anti-dilutive weighted shares	3,955	2,095,135	118,545

XML

Balance Sheets Components - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accounts Receivable Net Current [Abstract]
Accounts receivable, gross	$ 38,426	$ 23,970
Allowance for credit losses	(50)	(50)
Accounts receivable, net	$ 38,376	$ 23,920

XML

Balance Sheets Components - Schedule of Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 1,841	$ 435
Work in progress	16,963	10,184
Finished goods	4,826	1,731
Total inventories	$ 23,630	$ 12,350

XML

Balance Sheets Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Prepaid Expense And Other Assets Current [Abstract]
Advance to suppliers	$ 0	$ 853
Prepaid expenses	2,398	1,074
Other current assets	2,078	722
Total prepaid and other current assets	$ 4,476	$ 2,649

XML

Balance Sheets Components - Schedule of Property and Equipment Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 59,004	$ 28,088
Accumulated depreciation	(21,102)	(16,380)
Total property and equipment, net	37,902	11,708
Lab and Manufacturing Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	44,283	21,958
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,977	1,121
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	433	237
Construction in progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	7,100	638
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 5,211	$ 4,134

XML

Balance Sheets Components - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Depreciation expense	$ 5,700	$ 3,700	$ 3,300
Amortization expense for intangible assets	2,200	2,700	4,900
Impairment of internal-use software	0	959
Intangibles Assets not amortized	800	$ 700
Capitalized software costs	$ 6,000

XML

Balance Sheets Components - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 21,137	$ 15,040
Accumulated amortization	(15,160)	(12,971)
Intangible assets, net	5,977	2,069
Internal use software
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	9,434	9,377
Accumulated amortization	(8,633)	(8,312)
Intangible assets, net	801	1,065
Purchased intangibles
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	11,703	5,663
Accumulated amortization	(6,527)	(4,659)
Intangible assets, net	$ 5,176	$ 1,004

XML

Balance Sheets Components - Schedule of Future Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract]
2022	$ 2,277
2023	2,207
2024	1,311
2025	168
2026	14
Intangible assets, net	$ 5,977	$ 2,069

XML

Balance Sheets Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Payables And Accruals [Abstract]
Accrued payroll and related benefits	$ 7,237	$ 5,362
Deferred non-recurring engineering services	5,666
Revenue reserves	4,517	3,063
Short term lease liability	1,336	1,264
Accrued customer rebates	784	380
Other accrued expenses	4,742	2,894
Operating Lease Liability Current	$ 1,336	$ 1,264
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities
Total accrued expenses and other current liabilities	$ 24,282	$ 12,963

XML

Leases - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2022
Lease Disclosure [Line Items]
Cash paid for operating lease liabilities		$ 1,700	$ 2,300	$ 3,900
Sublease income				$ 100
Leases not yet commenced	Company entered into three operating leases that commence in 2022 with 2 to 5.3 year terms, for which the Company expects to record Right-of Use Asset of approximately $3.0 million and a Lease Liability of approximately $3.0 million at the commencement of these leases.
Operating lease right-of use asset	$ 8,194	8,194	8,892
Operating lease liability	$ 7,734	$ 7,734	$ 8,250
Maximum
Lease Disclosure [Line Items]
Operating lease, term of contract	5 years 3 months 18 days	5 years 3 months 18 days
Minimum
Lease Disclosure [Line Items]
Operating lease, term of contract	2 years	2 years
Corporate Headquarters
Lease Disclosure [Line Items]
Operating lease commencement date		Oct. 20, 2016
Lease term expiration date		Dec. 31, 2026
Operating lease, renewal term	5 years	5 years
Office Space
Lease Disclosure [Line Items]
Lease term expiration date		Mar. 31, 2027
Lease incentives received		$ 400
Lease option to extend		The remaining lease terms vary from a few months to 6 years. For its leases the Company has options to extend the lease term for periods varying from one to five years.
Option to extend		true
Office Space | Maximum
Lease Disclosure [Line Items]
Operating lease, renewal term	5 years	5 years
Lease term	6 years	6 years
Office Space | Minimum
Lease Disclosure [Line Items]
Operating lease, renewal term	1 year	1 year
Subsequent Event
Lease Disclosure [Line Items]
Operating lease right-of use asset					$ 3,000
Operating lease liability					$ 3,000

XML

Leases - Summary of Lease Related Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Right-of-use assets, net	$ 8,194	$ 8,892
Lease liabilities included in accrued expenses and other current liabilities	1,336	1,264
Long-term lease liabilities	6,398	6,986
Total operating lease liabilities	$ 7,734	$ 8,250
Weighted-average remaining lease term (years)	5 years	5 years 10 months 24 days
Weighted-average discount rate	4.50%	4.20%

XML

Leases - Summary of Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease cost	$ 1,761	$ 1,696	$ 1,419
Short-term lease cost	579	356	313
Variable lease cost	599	332	494
Total lease cost	$ 2,939	$ 2,384	$ 2,226

XML

Leases - Summary of Undiscounted Cash Flows (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
2022	$ 1,633
2023	1,737
2024	1,698
2025	1,580
2026	1,622
2027 and beyond	416
Total minimum lease payments	8,686
Less: amount of lease payments representing interest	(952)
Total operating lease liabilities	7,734	$ 8,250
Less: current obligations under leases	(1,336)	(1,264)
Long-term lease liabilities	$ 6,398	$ 6,986

XML

Commitments and Contingencies - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
Design and Simulation Licenses
Loss Contingencies [Line Items]
Purchase commitment	$ 5.4

XML

Debt Obligations - Additional Information (Details) - USD ($)				12 Months Ended
	Jul. 24, 2020	Dec. 12, 2019	Sep. 13, 2016	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Sep. 21, 2018	Jun. 30, 2018	Sep. 22, 2017	Aug. 31, 2015
Line Of Credit Facility [Line Items]
Repayment of outstanding loan				$ 0	$ 76,000,000	$ 2,000,000
MegaChips
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 30,000,000.0
Interest rate			0.09%
Revolving line of credit closing date				Dec. 31, 2020
Minimum | MUFG
Line Of Credit Facility [Line Items]
Debt instrument, maturity						1 month
Interest rate						1.01%
Maximum | MUFG
Line Of Credit Facility [Line Items]
Debt instrument, maturity						1 year
Interest rate						4.07%
Revolving Line of Credit | MUFG
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity								$ 50,000,000.0		$ 20,000,000.0
Loan Amount						$ 139,000,000.0
Repayment of outstanding loan	$ 76,000,000.0
Line of credit prepaid amount	12,000,000.0
Line of credit, prepayment penalties	$ 100,000
Revolving Line of Credit | SMBC
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity									$ 20,000,000.0
Repayment of outstanding loan						$ 2,000,000.0
Line of credit facility closing date				2020-09
Revolving Line of Credit | MegaChips
Line Of Credit Facility [Line Items]
Repayment of outstanding loan		$ 3,000,000.0
Revolving Line of Credit | Maximum | SMBC
Line Of Credit Facility [Line Items]
Debt instrument, principal amount							$ 20,000,000.0

XML

Stockholders' Equity - Additional Information (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Oct. 16, 2019
Equity [Abstract]
Common stock, shares authorized	200,000,000	200,000,000	200,000,000
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, voting rights	one vote

XML

Stock-based Compensation - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Nov. 30, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Aug. 04, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Accrued expenses and other current liabilities		$ 24,282,000	$ 12,963,000
Total fair value of awards		$ 161,200	$ 43,700	$ 300
Restricted Stock Units RSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted		438,474	682,517	3,012,399
Unrecognized compensation costs		$ 82,500,000
Cash Restricted Stock Unit Award CRSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted		3,025	11,844
Liability-based Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation costs		$ 600,000
Unrecognized compensation cost is expected weighted average period		5 months 4 days
Equity Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost is expected weighted average period		3 years 2 months 26 days
New Hires | Cash Restricted Stock Unit Award CRSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period			1 year
2019 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance	3,400,000	400,000
2019 Stock Incentive Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	2 years
2019 Stock Incentive Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	5 years
2020 Goals | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts					119.00%
2020 Goals | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts					144.00%
First Half of 2021 Goals | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts					76.00%
First Half of 2021 Goals | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts					141.00%
Second Half of 2021 Goals
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Accrued expenses and other current liabilities		$ 1,500,000
Second Half of 2021 Goals | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts		138.00%
Second Half of 2021 Goals | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage actual payouts		150.00%

XML

Stock-based Compensation - Schedule of Activity of RSUs, Cash Restricted Stock Unit Award (CRSU) and Performance Based Restricted Stock Unit Awards (PRSU) Granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restricted Stock Units RSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning Balance	2,735,706	2,989,322
Number of Shares, Granted	438,474	682,517	3,012,399
Number of Shares, Vested	(874,462)	(766,934)	(23,077)
Number of Shares, Forfeited	(72,521)	(169,199)
Number of Shares, Ending Balance	2,227,197	2,735,706	2,989,322
Grant Date Fair Value per share, Beginning Balance	$ 22.35	$ 13.00
Grant Date Fair Value per share, Granted	128.55	53.42	$ 13.00
Grant Date Fair Value per share, Vested	27.94	15.46	13.00
Grant Date Fair Value per share, Forfeited	33.34	13.72
Grant Date Fair Value per share, Ending Balance	$ 40.56	$ 22.35	$ 13.00
Cash Restricted Stock Unit Award CRSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning Balance	624
Number of Shares, Granted	3,025	11,844
Number of Shares, Vested	(3,649)	(11,220)
Number of Shares, Ending Balance		624
Grant Date Fair Value per share, Beginning Balance	$ 35.05
Grant Date Fair Value per share, Granted	111.93	$ 48.62
Grant Date Fair Value per share, Vested	$ 98.78	49.37
Grant Date Fair Value per share, Ending Balance		$ 35.05
Performance Restricted Stock Unit Award PRSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Granted	58,954
Number of Shares, Ending Balance	58,954
Grant Date Fair Value per share, Granted	$ 261.39
Grant Date Fair Value per share, Ending Balance	$ 261.39

XML

Stock-based Compensation - Schedule of Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 30,345	$ 16,966	$ 1,379
Additional Paid-in Capital
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	29,694	14,816	1,379
Equity Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	27,163	14,816	1,379
Equity Awards | Additional Paid-in Capital
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	27,163	14,816	1,379
Equity Awards | Cost of Revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,654	613	36
Equity Awards | Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	11,087	4,682	346
Equity Awards | Selling, General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	14,422	9,521	997
Liability-based Awards | Additional Paid-in Capital
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	2,531
Liability Based Awards to be Settled in Equity
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	2,829	1,193
Liability Based Awards to be Settled in Equity | Cost of Revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	114
Liability Based Awards to be Settled in Equity | Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	492	445
Liability Based Awards to be Settled in Equity | Selling, General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	2,223	748
Equity and Liability Based Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	29,992	16,009	$ 1,379
Liability Based Awards - Cash Settled
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	353	957
Liability Based Awards - Cash Settled | Cost of Revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	102	264
Liability Based Awards - Cash Settled | Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	143	415
Liability Based Awards - Cash Settled | Selling, General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 108	$ 278

XML

Income Taxes - Schedule of Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
United States	$ 32,379	$ (9,645)	$ (6,485)
Foreign	(24)	274	(130)
Income (loss) before income taxes	$ 32,355	$ (9,371)	$ (6,615)

XML

Income Taxes - Schedule of Components of Income Tax (Expense) Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
United States	$ (12)	$ (1)	$ 8
Foreign	(66)	0	0
Income tax (expense) benefit	$ (78)	$ (1)	$ 8

XML

Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets (liabilities):
Accrual, write-down and other	$ 5,442	$ 3,249	$ 2,469
Depreciation and amortization		257	76
Depreciation and amortization	(818)
Net operating loss and credits carry forwards	64,690	52,445	42,949
Total gross deferred tax assets (liabilities)	69,314	55,951	45,494
Valuation allowance	(69,314)	(55,951)	(45,494)
Total net deferred tax assets	$ 0	$ 0	$ 0

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Change in valuation allowance	$ 13,400
Federal net operating loss carry-forwards	259,600	$ 201,500
State net operating loss carry-forwards	64,500	64,000
Foreign net operating loss carry-forwards	$ 2,300	2,200
Federal net operating loss carry-forwards expiration year	2025
State net operating loss carry-forwards expiration year	2028
Foreign net operating loss carry-forwards expiration year	2028
Federal research and development tax credit carry-forwards	$ 3,900	3,900
State research and development tax credit carry-forwards	$ 3,600	3,600
Expiration of federal tax credits	2025
Total federal net operating loss carryforward	$ 111,200
Unrecognized tax benefits	$ 2,431	$ 2,436	$ 2,184

XML

Income Taxes - Schedule of Reconciliation of Effective Tax Rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
US Federal Rate	21.00%	21.00%	21.00%
R&D Credits			(10.90%)
Permanent differences and others	(63.30%)	90.40%	(18.30%)
Change in valuation allowance	(42.30%)	(111.40%)	8.20%
Effective income tax rate	0.00%	0.00%	0.00%

XML

Income Taxes - Schedule of Reconciliation of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Beginning balance	$ 2,436	$ 2,184
Increase (decrease) in balance related to tax position taken during prior periods	0	0
Increase in balance related to tax position taken during the current period		252
Decrease in balance related to tax position taken during the current period	(5)
Ending balance	$ 2,431	$ 2,436

XML

Income Taxes - Schedule of Tax Years Examination By Major Tax Jurisdictions (Details)	12 Months Ended
	Dec. 31, 2021
U.S. Federal
Income Tax Examination [Line Items]
Earliest Tax Year Subject to Examination	2018
Foreign Tax Authority | California State
Income Tax Examination [Line Items]
Earliest Tax Year Subject to Examination	2017
Foreign Tax Authority | Michigan State
Income Tax Examination [Line Items]
Earliest Tax Year Subject to Examination	2017

XML

401(k) Plan - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]
Maximum pre-tax contribution per employee	90.00%
Matching contributions	$ 1.0	$ 0.6	$ 0.6

XML

Segment Information and Operations by Geographic Area - Additional Information (Details)	12 Months Ended
	Dec. 31, 2021 Segment
Segment Reporting [Abstract]
Number of reportable segments	1

XML

Segment Information and Operations by Geographic Area - Schedule of Revenue by Country (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Revenue	$ 218,808	$ 116,156	$ 84,074
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Revenue	218,808	116,156	84,074
Taiwan | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Revenue	66,390	55,789	39,060
Hong Kong | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Revenue	82,503	30,306	16,534
United States | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Revenue	14,221	8,522	5,677
Other | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Revenue	$ 55,694	$ 21,539	$ 22,803

XML

Segment Information and Operations by Geographic Area - Schedule of Property and Equipment and Intangible Assets Attributable to Operations (Details)	Dec. 31, 2021	Dec. 31, 2020
United States
Segment Reporting Information [Line Items]
Percentage of long lived assets	57.00%	68.00%
Malaysia
Segment Reporting Information [Line Items]
Percentage of long lived assets	31.00%	7.00%
Taiwan
Segment Reporting Information [Line Items]
Percentage of long lived assets	5.00%	12.00%
Other
Segment Reporting Information [Line Items]
Percentage of long lived assets	7.00%	13.00%

XML

Related Party Transactions - Additional Information (Details) - USD ($)	1 Months Ended		12 Months Ended
	Aug. 31, 2021	May 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Property and equipment, net			$ 37,902,000	$ 11,708,000
Related party accounts receivable				$ 736,000
Restricted Stock Units RSU
Related Party Transaction [Line Items]
Equity award, granted			438,474	682,517	3,012,399
MegaChips
Related Party Transaction [Line Items]
Agreement termination date	Aug. 31, 2021
Related party accounts receivable			$ 0.0	$ 700,000
MegaChips | Equipment
Related Party Transaction [Line Items]
Property and equipment, net				$ 100,000
MegaChips | SiTime Corporation
Related Party Transaction [Line Items]
Percentage of outstanding common stock held			24.00%	43.70%
MegaChips Taiwan Corporation | Equipment
Related Party Transaction [Line Items]
Property and equipment, net				$ 100,000
Akira Takata
Related Party Transaction [Line Items]
Sales consulting services fee		$ 5,000
Agreement extension date			Dec. 31, 2022
Akira Takata | Restricted Stock Units RSU
Related Party Transaction [Line Items]
Equity award, granted		500
Equity award, vesting date		Nov. 20, 2021

XML

Related Party Transactions - Summary of Significant Balances, Transactions and Payments with Related Parties and Affiliates (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Related party accounts receivable		$ 736
MegaChips
Related Party Transaction [Line Items]
Sales through distribution agreement	8,167	5,714	$ 5,071
License expense		148	158
Commission expense	340	228	202
Interest expense			94
Cash paid for principal			3,000
Cash paid for equipment		209
Cash paid for commissions	340	228	228
Cash paid for licenses		25	$ 329
Affliates
Related Party Transaction [Line Items]
Consulting fees	254	380
Cash paid for consulting fees	$ 254	$ 380

XML

Subsequent Events - Additional Information (Details)	Feb. 23, 2022 shares
Revolving Line of Credit | Subsequent Event | Inducement Plan
Subsequent Event [Line Items]
Common stock, capital shares reserved for future issuance	250,000

XML

Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Allowance for Credit Losses
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	$ 50	$ 129	$ 168
Deductions Credited to Expenses or Other Accounts		(79)	(39)
Balance at End of Period	50	50	129
Deferred Tax Valuation Allowance
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	55,951	45,494	45,496
Additions Charged to Expenses or Other Accounts	13,363	10,457
Deductions Credited to Expenses or Other Accounts			(2)
Balance at End of Period	$ 69,314	$ 55,951	$ 45,494